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UK stock market dips below 5000

The FTSE 100 index has dipped below 5000 amid concerns about the UK economy, forthcoming budget cuts and tax increases. There is also concern about problems in Greece and the European debt markets which appear to be growing again. Against this background it seems so though UK investors are reluctant to chase the market although the fall below the 5000 level has surprised many.

There would also appear to be significant concern regarding companies with contracts with the public sector where budget sector cuts would appear to have already impacted upon many local authorities. There is talk of projects being suspended and other contracts being delayed or cancelled which is impacting upon a number of stockmarket quoted companies and privately held operations.

Even though there is a general opinion that George Osborne's budget was fair and expected it does seem to have opened the eyes of many investors to the significant problems within the UK. Whether the recent fall in the stock market is a sign of things to come or a knee-jerk reaction to what is effectively a new phase for the UK economy remains to be seen. However, the recently announced budget cuts are unlikely to be the last and could in reality be dwarfed by future changes.

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