Shares dive as Cameron urges action
Shares crashed around the world today as the spectre of global financial meltdown spread panic through stock markets.
In the City, almost £60 billion was wiped off the value of Britain's leading companies.
David Cameron joined forces with other world leaders to demand "decisive action" to avert a new financial catastrophe.
By mid afternoon the FTSE-100 was down 241.44 points, or 4.57 per cent, to 5046.97 points amid selling described as "absolute pandemonium." Mining companies and banks were among the worst hit shares in London.
There were also falls of more than five per cent on the German and French stock markets. On Wall Street, the Dow Jones Industrial Average opened down almost 3 per cent at 10806.48, having fallen 2.5 per cent yesterday.
The turmoil came after emergency measures unveiled by the US to prop up its ailing economy last night were dismissed as "too little, too late."
The Prime Minister's demand for political intervention came in a strongly worded letter alongside the leaders of Australia, Canada, Indonesia, Mexico and South Korea, warning that a "lack of visible political will" was jeopardising the recovery.
The letter, to French President Nicholas Sarkozy, who is currently head of the G20, is a clear attempt to set the agenda ahead of November's summit in Cannes.
They urged fellow leaders to summon the spirit of the London gathering in 2009, which resulted in action to boost global economies by $1.1 billion.
"The barriers to action are now political as much as economic," they wrote. "We must send a clear signal that we are ready to take the actions necessary to maintain growth and stability for all for the future." But it came against a backdrop of gloomy assessments from US financial leaders.
Robert Zoellic, President of the World Bank, warned that the global economy was "in the danger zone" and said his confidence that it could avoid double dip recession was "diminishing daily." US Federal Reserve chairman Ben Bernanke said that there were "significant downside risks to the economic outlook".
The Fed unveiled a $400 billion programme to boost America's feeble recovery dubbed Operation Twist which was given a frosty reception by the markets.
