Economics / Markets

Trading in London remained weak as noon approached, with the FTSE100 down 154.4 points (3.98%) to 3,728.96 as economic predictions paint an increasingly gloomy picture.

The Dow Jones opened more than 5% down this morning as investors feared a lasting global recession following the release of poor economic data across Europe and Asia.

The UK's economic output contracted by 0.5pc in Q3 according to the ONS, the first quarterly decline recorded since 1992.

Skandia Investment Group (SIG) has launched seven single strategy funds into the UK, including two funds covering the technology and healthcare sectors.

After a volatile start, the FTSE is just down 1.71 points (0.04%) to 4039.18 amid falls across Europe and Asia and a dismal day's trading in the US.

The likelihood of inflation becoming embedded in the UK economy now appears minimal and it could even undershoot the MPC's 2pc target over the medium term, according to Schroders' David Scammell.

The FTSE 100 was threatening to drop below 4,000 yet again on Wednesday after dramatic early losses on Wall Street.

The 50 basis points cut in interest rates announced on October 8 was a unanimous decision, according to the minutes of the MPC meeting.

Trading was volatile in London after mixed profit reports were released, with the FTSE100 down more than 0.5% around midday before making a slight recovery to 4,237.29, a drop of 45.38 points (1.06%).

Global currency markets face either a textbook worldwide recession, or a "bleaker" scenario in which the Japanese yen overtakes the dollar and becomes the strongest currency, according to Thanos Papasavvas, head of currency management at Investec.