They have “pledged to mount a powerful response” and will deliver a “strong and co-ordinated international response to address the renewed challenges facing the global economy”. This will “require a collective and bold action plan, with everyone doing their part” they said.
There is unlikely to be anything concrete put forward until the next G20 leaders’ meeting which is not until 3 November.
These pronouncements were made on the same day as stock markets and commodity prices turned bright red as the gloomy prospects for the global economy worsened partly on the back of IMA comments about a “dangerous new phase” of low growth.
We are now well and truly in a confidence crisis on top of a credit crisis as the IMF’s comments were echoed by the President of the World Bank, Robert Zoellick, when he described the world economy being in a “danger zone”.
Yesterday, the price of gold (by 2.3%), silver (9.3%), copper (7.5%) and oil (5.5%) all fell as did the Dow Jones (3.5%), Euro Stoxx 50 (4.9%), the FTSE 100 (4.7%), the Dax (5%), Nikkei (2.1%) and Hang Seng (4.9%) indices.
Another contributor to global weakness is the fall in the value of Asian currencies as investors turn to the relative safety of the dollar. The South Korean won (4.7%), Australian dollar (5.6%) – a proxy for commodity prices – the Indian rupee (4.7%) and Malaysia’s ringgit (3%) all ended a troubled week down.
European markets have opened slightly up this morning, with the FTSE 100 and Eurofirst 300 both up 1%, the Dax is up 0.65%.
These are all rises from extreme lows of across the board of yesterday and most of them are close to their low point over the past year.
