Stock Market Rocky Ride Continues

As the credit crunch continues to eat away at the heart of the worldwide economy and the wheels of business, stock markets around the world are slowly coming to terms with the fact that we are on the verge of what could me a major worldwide recession.  The recent three quarter point cut in US base rates was as dramatic as it was need, but also shows the true magnitude of the situation.

While calls for a similar cut in UK base rates may be well short of the mark there is no doubt that UK rates are also on the way down over the next few months.  The Bank of England will most likely opt for a number of smaller cuts so as not to alarm the financial markets, but also try to build up some momentum in the longer term.  That said, we may well see a half point drop in UK rates in the short term in order to give the economy a “kick start”.

Either way the next few months are set to see a rocky ride for those brave enough to speculate on the UK and US stock markets.  The one thing which markets dislike more than anything is uncertainty although at this moment in time this is something which is in plentiful supply.