Ratings agency Moody's has downgraded three leading French banks, citing the worsening eurozone debt crisis.

The Bank of England is set to ignore mounting pressure to pump more money into the economy on Thursday amid fresh fears of another global recession.

The number of mortgage approvals increased to a 14-month high in July, figures showed today, but fears about the health of the housing market persisted.

Stock markets around the world endured yet another day of turmoil yesterday, as fears about the global economy and the deteriorating sovereign debt crisis in the eurozone continued to unnerve investors.

The Fed's concern is to ensure that any funding problems at a big European bank do not infect the rest of the system

Things may have looked rather brighter on the blue-chip index last night after a volatile session finished with a major rally, but the possible effects of the worst-case scenario for the economy were still being mulled over in the City.

This vicious cycle could, at worst, trigger another sovereign debt crisis or Europe-wide credit crunch

As a sell-off of the European banks prompted the top-tier index into another major slide, voices in the City were yesterday mulling over which companies were looking vulnerable to a takeover in the wake of the recent market turmoil.

With traders breathing a sigh of relief last night as the FTSE 100's losing streak was finally brought to an end, Cobham and Ultra Electronics were shooting up the mid-tier index after city scribblers said they were both well placed to weather the storm facing the defence companies.

The fallout from the Greek debt crisis continued to take its toll on European banks yesterday, forcing France's Societe Generale to issue a profits warning and Italy's UniCredit to reveal it has made a large writedown.

Investors hoping that the sale of its market-research arm will prompt a full break-up of Aegis received a blow yesterday, as the advertising group followed the wider market down.