The storm clouds hanging over the global economy darkened last night as the
chaos in the eurozone took its toll on the rest of the world.
Shares in New York plummeted and oil tumbled to an 18-month low after a raft of bleak figures showed weakness in the U.S. and China -- the world's two biggest economies -- as well as in Europe.
Signs of life in the ailing British economy provided a rare bright spot, with factory orders and retail sales on the rise.
But warning that "rough waters may lie ahead" for the UK, Bank of England official Martin Weale said: "Far from improving, immediate prospects for the economy have worsened."
The Dow Jones was down around 250 points on the second worst day of the year for Wall Street. The price of crude oil fell more than 2pc to $90.30 in London -- the lowest level since December 2010 and nearly 30pc below the $128 a barrel reached in early March.
It came as the eurozone economy took another dramatic turn for the worse and Spain lurched closer to needing a full-blown bailout.
Research group Markit said the single currency bloc's beleaguered private sector suffered a bruising decline this month, with German firms now also feeling the pain.
The purchasing managers' index, where anything below 50 represents contraction, hit 46 in June -- the lowest level since June 2009 when Europe was deep in recession.
Markit said the figures suggested that the eurozone economy, which was saved from recession in the first quarter of the year by solid growth in Germany, was set for a 0.6 percent decline in the second quarter.
"It is a worryingly steep downturn we are seeing and it is spreading from the periphery through to Germany," said Chris Williamson, chief economist at Markit.
Borrowing costs in Spain reached a new high as investors fretted about the state of the basket case banking system and the government's creaking finances.
Madrid sold pounds sterling 1.8 billion of five-year debt but was forced to pay an interest rate of 6.07 percent -- a 16-year high and widely seen as unsustainable.
Fears that the euro crisis is infecting the global economy intensified as US manufacturers suffered their worst month since July last year and output from Chinese factories declined.
There was better news in Britain, where dwindling hopes of recovery were boosted by an unexpected improvement in orders and confidence in the manufacturing sector and a rise in High Street sales.
Most Popular Stories
- SEO Traffic Lab Celebrate Wins at Digital Marketing Event 'Internet World 2013' in London
- Social Media Initiatives Should Follow Customers' Lead
- Apple CEO: Offshore Units Not a 'Tax Gimmick'
- U.S. Senate Accuses Apple of Large-scale Tax Avoidance
- UTEP Water Recycling Project Wins Venture Titles
- Marketo Makes a Mint in IPO: Stock Shoots Up More than 50 Percent
- Bieber Booed at Billboard Awards
- Crude Oil Up, Gasoline Down
- Austin Startup Compare Metrics Raises $3.5 Million for Expansion
- Why So Many Top 'Car Guys' Are Actually Women