Economics / Markets

Outgoing Bank of England (BoE) governor Mervyn King has accused banks of attempting to influence financial regulation by putting pressure on senior politicians - including the Prime Minister.

A dramatic shift in the outlook for interest rates has been seen with money market indicators now pricing in a base rate rise to 0.75% in two years' time rather than three.

Former Chancellor Alistair Darling, who oversaw the bail-out of RBS and Lloyds in 2008, has urged the government to avoid a rapid disposal of taxpayers' stakes in the banking giants.

Short-term borrowing rates in China have soared to record highs as credit seizes up, prompting fears that the country's liquidity squeeze may be spinning out of control.

A sharp fall in factory output in China cast a shadow over the global economy yesterday as the eurozone remained mired in recession.

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Markets across the globe tumbled overnight after the US Federal Reserve announced it may slow down asset purchases by the end of the year.

Five major high street banks and building societies have agreed plans to plug an aggregate capital shortfall which at the beginning of the year stood at £27bn, the Prudential Regulation Authority (PRA) has announced.