The FTSE 100 has fallen by more than 1,000 points in October alone.
The FTSE 100 has been in freefall since the start of October, with a number of factors contributing to the drop. This includes Brexit, the US-China trade war and the recent economic downturn. Here’s a look at what has caused the market to fall so dramatically and why it is likely to continue falling.
What is causing this drop?
The main factor causing this dramatic fall is Brexit. Although Britain’s departure from the European Union was originally scheduled for March 29th 2019, Prime Minister Boris Johnson announced on October 15th that he would be suspending Parliament until November 14th. This means that there will be no MPs sitting in Parliament for more than a month, which could allow Johnson to push through his plans for a no-deal Brexit without opposition.
This suspension has led to many MPs calling for Johnson to be impeached and some even going as far as saying they would refuse to pay taxes until he was removed from office. These calls have intensified since Johnson announced that he would be proroguing Parliament until November 14th, leaving only six weeks before Britain is set to leave the EU without a deal.
A second factor contributing to this drop is President Trump’s recent announcement of new tariffs on Chinese goods. The tariffs are set at 10% and will increase by 5% each year if China does not make concessions regarding its trade practices with America. Although Trump said that these tariffs would not affect American consumers or businesses directly, their effects will still trickle down into other sectors of business and hurt profits.
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