Markets plummet after US no-vote
No-vote sparks financial chaos
Published:
UK STOCKS plunged to a four-year low today after the United States rejected a £385 billion rescue package to help its ailing economy.
The vote stunned traders around the world, prompting record falls on Wall Street and huge drops on the Asian markets.
London’s FTSE 100 Index slumped 2.3% to 4705.5 – its lowest point since December 2004.
President George Bush said he was “disappointed” over its failure of the proposals he said were necessary to stave off financial panic and a “long and painful recession” in the US.
The Bill was rejected 228-205 by the US House of Representatives, with 133 Republicans and 95 Democrats refusing to back the rescue package.
US political leaders will now go back to the drawing board and try to revive the rescue package.
The vote had been preceded by unusually aggressive lobbying and the president had used a “call list” of people he wanted to persuade to vote yes.
Members of the House shouted news of the plummeting Dow Jones average as others crowded on the House floor during the drawn-out and tense call of the roll, which dragged on for about 40 minutes as leaders on both sides scrambled to corral enough of their rank-and-file members to support the deeply unpopular measure.
Speaking in the Oval Office of the White House, Mr Bush said: “We put forth a plan that was big because we got a big problem.
“I’m going to be talking to my economic advisers... and we’ll be working with members of Congress – leaders of Congress, on the way forward.
“Our strategy is to continue to address this economic situation head on. And we’ll be working to develop a strategy that will enable us to continue to move forward.”
House Democrats and Republicans said they hoped to continue bipartisan negotiations and bring another economic Bill to the floor for a vote, possibly later this week.
In the UK, Gordon Brown pledged to do “whatever is necessary” to protect Britain’s financial system after the collapse of the bill.
The Prime Minister said the vote was “very disappointing” but insisted the UK government was taking “decisive action” to tackle problems.
