THE UK's biggest companies saw further stock market losses yesterday at the end of the worst week for the FTSE 100 index for more than six years.
The declines end a short revival for the Footsie and come amid deepening fears over the global economy, a falling pound and slumping house prices.
Lower commodity prices have hit the index as oil and mining companies make up about a third of
the index. Banks have also come under more pressure.
The FTSE closed yesterday at 5,240.7, a fall of 121.4 or 2.3 percent, taking the week's slump to 7 per cent and bringing stocks back into "bear market" territory, more than 20 per cent below last October's peak. It is the worst fall since July 2002, when the index dropped 8.5 per cent, following US markets downwards after the Enron and WorldCom scandals.
The news came as pressure intensified on the government to levy a windfall tax on energy firms to reduce winter bills for low-income households.
The country's top trade unionist said ministers had to bring forward measures to help hard-pressed families or risk losing further public support.
The leader of a back-bench rebellion calling for a windfall tax claimed the support of 100 Labour MPs and said it was "immoral" that energy companies were making massive profits on the worldwide rise in fuel prices.
In a speech to CBI Scotland on Thursday, the Prime Minister said there would be no "short-term gimmicks or giveaways", which was interpreted as dashing hopes of a £100 rebate for struggling families.
Brendan Barber, general secretary of the Trades Union Congress, which holds its annual conference next week, said yesterday he would call for a windfall tax on the "excess profits" of energy companies to help the "poorest and most disadvantaged".
He said: "Millions of our members are facing real economic difficulties. We want to see the government addressing those issues with urgency."
Asked what would happen to the government if nothing was done, Mr Barber warned: "I think they would lose public support.
"Last month Scottish Gas increased gas prices by 35 per cent – the latest in a long line of huge hikes by utility firms and the second rise from the company in a year. Customers who receive gas and electricity from the firm now face an average annual bill of £1,317, up £400 on last year.
Labour back-bencher Fabian Hamilton, who has tabled a Commons motion demanding a windfall tax, said: "What is a Labour government for? We are there to help the most vulnerable. If we are not doing that, then I wonder what we are doing."
Downing Street said talks with energy firms were continuing and promoting energy efficiency measures was the best long-term way of cutting bills.
The full article contains 485 words and appears in The Scotsman newspaper.
