The world’s stock markets are stumbling. By the night of Monday 24 August, the main US and UK indices had lost about 10 per cent of their value in the space of a week. On its own, that’s nothing too special. Stock markets are volatile. They hit air pockets of similar magnitude in, for example, 2011, 2012 and 2013. But the suddenness of this synchronised collapse, with most of the damage done in just a couple of days, is making everyone nervous.
What has caused this abrupt stalling of the engines in the world’s financial centres? The immediate culprit seems to be the stock-market blow-up in China. The collapse of the Shanghai bourse over the past weeks has been twice as bad as those of London or New York – and it came on the heels of a 20 per cent drop already suffered since June.
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