This is an FT archive article, originally published on 20 October 1987

The market’s natural instinct yesterday was to conceal its shock by claiming the whole collapse had been predictable. But in truth, for London it came from an almost clear sky. Rising US and German interest rates were not supposed to affect UK equities because Mr Lawson had cleverly anticipated all that back in August. And although markets have been known to overreact when a bear trend has been established, who could conceive of a ruinous plunge of more than 10 per cent in a market perched near its all-time high?