Moving into the final moments of trading, the UK’s leading index is down more than 3% after shedding yesterday's gains.  

Yesterday’s last-minute surge for the FTSE had been all but wiped out when the market opened this morning and the downturn has continued fairly steadily throughout the day. News this morning that the MPC had toyed with slashing the base rate even more spectacularly than the 1.5% implemented earlier this month fuelled further rate-cut expectations, and highlights the full extent of the BoE's concerns. However, the revelation did little to brighten the bleak forecast for the UK economy and the FTSE inevitably tumbled more than 148 points throughout the day, losing 3.5% by 4pm.

Miners fared particularly badly on the back of continued falling demand for metals, with Rio Tinto continuing yesterday's slide with a further 3.5% drop. Banks also struggled; HSBC and Barclays posted losses of 8.2% and 7.2% respectively. The noteworthy exception in a dismal day for financials came with HBOS shares up 6.2% as Lloyds TSB investors agreed overwhelmingly to take over the bank, with the deal expected to go ahead early next year. Retailer Marks & Spencer had a poor day, down 4.5%, despite announcing a one-day sale in an attempt to boost pre-Christmas profits.   

In yet another indicator that economic conditions show no sign of easing, reports that manufacturing businesses are expecting to see the fastest contraction in output for 30 years added more gloom to the markets, with the FTSE now teetering on the edge of the psychological 4000 mark. Many manufacturers are limiting expenditure to the absolute minimum, with slightly increased numbers of redundancies and plant closures reported. All this will make grim reading for investors, who seemed to need little encouragement today to push the sell button.

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