Economics / Markets

Strong losses for the mining sector coupled with a poor start on Wall Street has smashed the FTSE100 this afternoon.

The rate of CPI inflation hit 5.2pc in September, up from 4.7pc in August. The annual rate of RPI inflation, meanwhile, edged up to 5pc, from 4.9pc a month earlier.

Economists have called for other countries to follow the lead of the UK Government following its announcement that it will shore up RBS, HBOS and Lloyds TSB with £37bn. That action, they said, should be taken sooner rather than later.

The credit crunch will "set the City back a decade" and cost 62,000 City-workers their jobs, according to the centre for economics and business research (cebr).

The FTSE100 ticked above 4,000 once again this afternoon following a brief rally ahead of Wall Street's Friday session.

The market's fairly mute reaction to the banking rescue package suggests some feel it may not go far enough and investors should expect more turmoil to come, according to New Star's Guy de Blonay.

F&C has launched Active Return fund, a pooled investment portfolio that will target returns of 2-4pc per annum over short term money market rates and low volatility.

The Bank of England has cut interest rates a day early to 4.5pc as part of a co-ordinated move with other central banks.

Base rates should be cut by 1pc tomorrow, which would enhance the MPC's reputation and demonstrate that it grasps the urgency of improving the dire state of markets, according to Douglas McWilliams, chief executive of cebr.

The FTSE was fast approaching a staggering 9% drop on a Monday developing into the blackest yet.