Economics / Markets

World markets including the FTSE fell in early trading as weak economic data and Moody's downgrade of 15 banks unnerved investors.

UK banks including RBS, Barclays and HSBC are set to be downgraded by Moody's this evening, it has emerged.

The FTSE 100 fell alongside other major markets across Europe today, after the Federal Reserve cut its growth forecast for the US economy.

The Bank of England's Monetary Policy Committee (MPC) voted five to four to maintain quantitative easing (QE) at £325bn this month, overruling the governor and three colleagues who called for further expansion.

Governments across Europe are set to buy Spanish and Italian bonds through two European rescue funds, a move the ECB hopes will send a signal to financial markets that Germany is behind the eurozone.

The drop in inflation announced yesterday has paved the way for the Bank of England to go through with another round of quantitative easing (QE) as early as next month, reports suggest.

The UK's inflation rate posted another surprise drop in May, falling to 2.8%, as the lack of activity in the UK continues to bring prices down sharply.

Moody's has downgraded the credit ratings of five of the Netherlands' largest banks as the country's economy struggles with a domestic recession and the effects of the eurozone crisis.

FIVE THINGS

Asian markets jumped overnight and European exchanges are expected to open strongly after pro-bailout party New Democracy scraped a narrow win at the Greek election.