Economics / Markets

European markets rallied late on Friday as Italy approved new austerity measures, a move which is set to precede the resignation of Prime Minister Silvio Berlusconi.

Ratings agency Standard & Poor's (S&P) was last night at the centre of a storm after it accidentally downgraded France's AAA rating.

Business leaders will today make a fresh plea to George Osborne to scrap the 50p rate of income tax and increase personal allowances to protect the British economy from the worst of the eurozone crisis.

The Bank of England (BoE) has kept interest rates at the historic low of 0.5% for the 33rd straight month, and held fire on additional quantitative easing measures after pumping an extra £75bn into the facility last month.

Markets across Europe recovered from early losses on Thursday despite a new warning from the EU Commission that the eurozone may fall into recession next year.

Germany and France have begun preliminary talks about a possible break-up of the eurozone, according to reports, amid fresh fears about the future of Italy after the nation's cost of borrowing hit a new record.

Neil Woodford has revealed his "increasing concern" about the situation in the eurozone as he warns of a European credit crunch and the risk of the UK following Europe into recession next year.

The Financial Services Authority (FSA) has proposed rules to bring the protection of policyholders with unit-linked and index-linked life insurance products in line with new European legislation.

The FTSE 100 dropped sharply in morning trading as investors fretted over the future of Italy following a spike in the country's bond yields to record levels.

The Financial Services Authority (FSA) has fined a Dubai based private investor $9.62m (£6m) for manipulating the closing price of securities on the London Stock Exchange, in the largest fine imposed by the FSA on an individual.