Stock markets rallied yesterday after better-than-expected jobs figures from the US helped investors shrug off disappointment about a lack of immediate action to tackle the eurozone debt crisis.
Employers in the world’s largest economy created 163,000 jobs last month – the highest number since February and well ahead of the 100,000 that had been predicted.
The figures settled investors’ nerves after markets fell sharply on Thursday when European Central Bank president Mario Draghi failed to announce concrete plans to stem the crisis, despite having raised hopes by promising to do “whatever it takes” to save the euro.
In Paris, the Cac 40 rose 4.4 per cent, Germany’s Dax gained 4 per cent and the Ibex 35 in Spain leapt 6 per cent. Spanish bond yields also fell below the 7 per cent level seen as unsustainable.
The FTSE 100 Index rose 125 points, or 2.2 per cent, to 5,787.30 despite fresh figures showing growth in the UK’s services sector – which accounts for about three-quarters of the economy – had fallen to its lowest level in 19 months in July.
The Markit/Cips services purchasing managers’ index fell to 51 last month from 51.3 in June, its lowest level since December 2010 and only marginally above the 50 mark that separates growth from contraction.
Paul Smith, senior economist at Markit, said the slower growth was “somewhat disappointing” because many economists had expected a bounce-back as demand recovered following the extra bank holiday for the Queen’s Diamond Jubilee.
Howard Archer, chief UK economist at IHS Global Insight, said: “The survey reinforces expectations that the Bank of England will have to take further stimulative action to try to boost the economy.”
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Weather for Edinburgh
Saturday 25 May 2013
Temperature: 6 C to 17 C
Wind Speed: 13 mph
Wind direction: West
Temperature: 9 C to 16 C
Wind Speed: 14 mph
Wind direction: South west