Falling Dow leads to 2% decline in City values

Two worryingly weak trading sessions on Wall Street ensured a dismal start to the shortened trading week in British equities. The weakness in the US and across global markets stemmed from the remarks made last week by Alan Greenspan, chairman of the US Federal Reserve.

At the close, the FTSE 100 was left with a 128.8, or 2 per cent, decline at 6,246.4, the day's lowest. The FTSE 250 was also pressured, closing at a session low of 6,017.9, down 36.4.

Turnover in equities was a lowly 874 million shares, although that came as no surprise to marketmakers, after the long bank holiday weekend.