FTSE 100 plunges on Bank of England forecast

Wednesday 13th May 2009, 5:08PM BST.

FTSE 100 plunges on Bank of England forecast A grim forecast from the Bank of England pushed the FTSE 100 further into negative territory.

After the Bank forecast a long road to recovery, the index fell sharply and lost 2.13 per cent over the day to end at 4331.37, as traders start to regard recent positivity as a false dawn.

Financial and mining stocks, which are among the most vulnerable to bad economic news, were the casualties on the index.

Property firm Land Securities Group dropped 14.42 per cent, while Xstrata fell 12.99 per cent and Hammerson was down by 11.76 per cent.

Defensive stocks rose again on the index as investors favoured less risky sectors.

Pharmaceutical firm Shire was up by 3.04 per cent, while consumer products giant Unilever rose by 2.72 per cent.

US stocks also slid further as retail sales data came in worse than expected, with the Dow Jones industrial average falling 2.03 per cent, and the S&P 500 dropping 2.19 per cent.