Stocks fell on Friday as Donald Trump said a US government shutdown should happen under Joe Biden’s watch rather than under his administration.
European stocks fell 0.9pc amid the threat of tariffs from the US president-elect, who has created more uncertainty today after suggesting a stalemate over the US budget should lead to a shutdown now rather than later.
The FTSE 100 fell as much as 1.3pc, the Cac 40 in Paris dropped up to 1.4pc and the Dax in Frankfurt dropped as much as 1.6pc.
Wall Street’s main indexes opened lower as the looming budget showdown combined with fears over high interest rates next year. However, they have subsequently rebounded, with the S&P 500 up 1.3pc.
A spending Bill backed by Mr Trump failed in the US House of Representatives on Thursday as dozens of Republicans defied the president-elect.
The move leaves Congress with no clear plan to avert a fast-approaching government shutdown that could take effect from midnight and disrupt Christmas travel.
Mr Trump said: “If there is going to be a shutdown of government, let it begin now, under the Biden Administration, not after January 20th, under “TRUMP.”
“This is a Biden problem to solve, but if Republicans can help solve it, they will.”
It came in the week the US Federal Reserve reduced its expectations for interest rate cuts next year. Policymakers forecast just two cuts in 2025, down from a prediction of four just three months ago.
