Volatility has been more the rule than the exception in recent trading as last week proved to be another turbulent week for the world’s markets. Friday’s figures brought the widely anticipated confirmation that the UK is officially in a recession. The Office for National Statistics revealed that the UK’s economy shrank by 1.5% in the final three months of 2008. The figures showed that the plunge was sharper than forecast, sparking fears of a deep and prolonged recession.

The FTSE declined 2.3 percent last week, led by financial companies, as investors speculated banks may need to take more write downs or the government may have to nationalise one or more of them.

The Dow fell 203.66 points, or 2.46% on the week, to close at 8077. The S&P lost 18.17 points, or 2.14% to close at 831.95 and the Nasdaq fell 52.04 points or 3.40% last week, closing at 1477.29.

Barclays shares collapsed for a ninth straight day on Friday despite attempts by chief executive John Varley to reassure investors by dismissing fears that the bank needs more capital and may be nationalised and concerns that Barclays has been too optimistic in its write downs. Barclays ended the week at 51.2p.

The pound fell to its lowest level since 1985, sliding by more than three-quarters of a cent against the dollar to $1.3668, although it regained some strength against the Euro.

Longer-dated U.S. Treasuries fell for a fifth straight day on Friday as investors worried about the impact of large amounts of new debt to fund the country’s economic rescue plans. The yield on the 30-year T-Bond had its biggest weekly jump since November 2001.

Oil prices rose more than 6 percent on Friday after oil consultant Petrologistics estimated production would fall by 1.55 million barrels per day in January as part of OPEC’s efforts to meet a 2.2 million barrels per day reduction agreed in December. WTI settled up $2.80 at $46.47 a barrel, while Brent traded up $2.98 at $48.37 a barrel.

Gold jumped more than 3% on Friday to its highest in three weeks, briefly breaking above the $900-an-ounce level, as volatile currency markets and solid investment demand spurred bullion buying.

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