Barack Obama as next US President sparks hope for world economy

05 November 2008 / by Rebecca Sargent
The election of Barack Obama as president of the United States has sparked hope for the US and world economy as it has ignited the change that is needed for financial recovery.

America's equivalent of the UK's FTSE 100, the Dow Jones, was up by 3.3 per cent as it closed, amid hopes that Barack Obama would be triumphant and kick start the world's largest economy. The dollar has also strengthened against the Euro following the election.

During the election, it has become clear that the economy is a number one concern for American citizens who are facing daily financial stresses. And, economists believe that Obama's focus on this and the revival of the economy has helped him on his way to being elected.

Obama's proposed plan to jump start the economy includes help for those struggling to pay their mortgages, tightening of regulations within the mortgage market and of banks, an energy windfall for struggling households and tax cuts for working families.

Speaking before the results of the election, market strategist at share dealing company City Index, Joshua Raymond, said: "The election could well provide the kick off for bullish November. In the context of the current financial climate, it is possible that an Obama victory could well provide the necessary spark for optimism to return to the markets.

"Obama has quickly fashioned himself as an inspiration for change; a move away from the old smoking room bad habits to a new, multi-dimensional way of thinking. Place this way of thinking into the most powerful chair in the world and it will not be too hard for this inspiration to rub off and quickly turn itself into optimism."

Such optimism could, according to experts, not have come soon enough for the world economy, and it is hoped that drastic change implemented by Obama in the US will in turn filter through to the UK and world economy.

Commenting on Obama's success and what it means for the economy, Nick Ford from Scottish Widows Investment Partnership said: "Never underestimate the ability of the US to bounce back from a period of adversity and re-energise itself. The country now has a President with a great chance to restore the country's reputation overseas and measures taken to cure the financial crisis have already been taken.

"I expect a new "feel-good" factor to gradually take hold once the worst job losses are over and house prices stabilise. There are already signs that the credit markets are beginning to recover."

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