Shares in London are in freefall this afternoon after the Dow opened in New York to panic selling. The FTSE was down more than four per cent by 15:30 with banking shares among the worst sufferers.
The fall was triggered by unexpectedly bad manufacturing data from the United States, but analysts believe continued worries about the eurozone and rising tensions in Israel have contributed in unnerving the markets.
The Dow Jones was also trading down four per cent but the biggest pain appeared to have been felt on the German Dax which went down five per cent. Morgan Stanley has announced it's cutting its growth forecasts for the eurozone to 0.5 per cent this year - a dramatic downgrade from just a few weeks ago.
As Allister Heath at City AM points out on Twitter, the punishment of the banks on the share markets comes at the same time as a record high for the price of gold.
The disastrous afternoon in the City comes after disappointing retail sales figures from this morning. They increased by 0.2 per cent in July compared with June - half the rise expected by forecasters.