Closing post
Time to wrap up… here are are today’s main stories:
Yellen warns of worldwide panic if debt ceiling not raised
European stock markets are ending the day in the red, as fears over the US debt ceiling ripple across trading floors.
In London, the FTSE 100 index is down 31 points or 0.4% at 7746. The blue-chip index is being dragged down by Vodafone, which has now lost over 8% today after announcing 11,000 job cuts this morning.
Germany’s DAX and France’s CAC are down around 0.2%.
Investors have noted warnings from US Treasury Secretary Janet Yellen today that a default on government debt would likely leave millions of Americans without income payments, potentially triggering a recession that could destroy many American jobs and businesses.
Yellen told a gathering of community bankers that the unprecedented economic and financial crisis would be exacerbated by possible disruptions to the federal government’s operations, including air traffic control, law enforcement, border security and national defense, and telecommunications systems.
The accompanying financial crisis could multiply the severity of the downturn, she said in remarks prepared for delivery, adding,
“It is very conceivable that we’d see a number of financial markets break - with worldwide panic triggering margin calls, runs and fire sales.”
Yellen also warned:
“Our economy would suddenly find itself in an unprecedented economic and financial storm….
And the resulting income shock could lead to a recession that destroys many American jobs and businesses.
Updated
