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The UK’s FTSE 100 index has plummeted in its worst day of trading since the start of the pandemic, ending a punishing week for global financial markets.
Trading has been hammered in the aftermath of Donald Trump unveiling his full range of import taxes on countries around the world.
Sir Keir Starmer is due to hold a series of talks with world leaders over the weekend, as nations reel from the economic hit.
London’s top stock market index shed 419.75 points, or 4.95%, to close at 8,054.98.
It marks the biggest single-day decline since March 2020, when the index lost more than 600 points in one day.
Downing Street made clear on Friday that the UK is “disappointed” with the US levies and will be speaking with partners in the coming days as it grapples with a “new era” in trade and a “shifting” economic landscape.
From Saturday, UK goods into the US will be subject to a 10% import tax, and the car industry has already been hit with a 25% levy which came into effect in the early hours of Thursday morning.
Number 10 contradicted the US president’s claim that the Prime Minister was “very happy” about the imposition of the tax on British goods entering America.
Speaking to reporters on board Air Force One on Thursday, Mr Trump had said of Sir Keir: “We have a very good dialogue. I think he was very happy about how we treated them with tariffs.”
Asked on Friday whether that characterisation was accurate, a Downing Street spokesman said: “We’re disappointed by the tariffs that have been brought in.
“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally, but both the Prime Minister and the Business Secretary have been very clear over the last 24 hours that we will continue to act in the best interests of the UK, and we’re prepared to do so.”
The official added: “We’ll be engaging with international leaders over the weekend… The need for engagement with international leaders is clear. It is a changing, shifting global economic landscape.”
All but one stock on the FTSE 100 fell on Friday, with Rolls-Royce, banks and miners among those to suffer the sharpest losses.
Analysts for AJ Bell estimated that about 4.9 trillion US dollars (£3.8 trillion) had been wiped off the value of the global stock market since the US president announced his tariffs on Wednesday evening.
“China’s retaliation to Trump’s latest round of tariffs means that both sides are not backing down.
“It caps off a horrible week for financial markets and dragged share prices even lower,” AJ Bell investment analyst Dan Coatsworth said.