Ananova:

The FTSE index of shares in Britain's biggest businesses has closed after the worst year in its history.

A last-minute dose of post-Christmas cheer was not enough to prevent the FTSE 100 from notching up a record fall of 31%, closing at 4434.2.

A disastrous 12 months saw share prices tumble as the UK's blue chip companies were hammered by the credit crunch, a housing market slump and the international banking crisis.

Stock markets across the world have suffered this year, with Japan's Nikkei 225 Index also ending 2008 with a historic annual fall of 42%, while China's benchmark Shanghai Composite Index closed 2008 down 65%.

Despite a rise of 41.5 points today, the FTSE currently stands nearly two-thirds below its opening mark of 6456.9 for 2008.

The dire performance even surpasses 2002's 25% decline in the midst of the dotcom crash, and is the worst in its 24-year history.

The fall is also the second biggest annual slide of all time, only overshadowed by the 55.3% fall for the FTSE All-Share seen in 1974.

Banks HBOS and Royal Bank of Scotland are among the year's worst performers. The two groups were forced to call on the taxpayer for a multi-billion pound rescue bailout after suffering in the aftermath of the credit crunch - a crisis which slashed HBOS shares by 90% and more than 80% for RBS.

Housebuilders, too, will look back on a torrid 12 months that have seen many suffer the ignominy of being kicked out of the FTSE 100.

Taylor Wimpey and Persimmon were both ejected from the top flight in 2008, while Taylor Wimpey - Britain's biggest housebuilder - was even relegated out of the FTSE 250 in the last reshuffle earlier this month.

But some firms have performed well in the year, including miner Randgold, which has seen a rise of around 60% rise thanks to higher commodity prices earlier in the year.

The Footsie's overall performance came as a surprise to many experts, many of whom made bullish predictions at the start of the year that the FTSE 100 could beat its all-time high to hit 7000 or more in 2008.

So for 2009? BGC Partners senior strategist Howard Wheeldon forecasts a 10% rise to around the 4800 mark over the course of the year - but warns that things could get worse before they get better.