City faces new falls as Wall St tumbles

The City was braced for more stock market losses today after a sharp slide on Wall Street amid fresh fears about the world economy.

The latest share turmoil, which yesterday saw the FTSE 100 index of leading shares plunge more than 3.5 per cent, came as former top financial regulator Sir Andrew Large was appointed Deputy Governor of the Bank of England, responsible for financial stability.

Sir Andrew, who is currently deputy chairman of Barclays, takes over the position vacated by David Clementi last Friday. The role includes membership of the Bank's nine-strong monetary policy committee but, because of prior commitments, he will not attend the MPC's latest interest rate-setting meeting which kicks off today. Rates are widely tipped to remain at 4 per cent when the MPC announces its decision tomorrow.

On stock markets, the selloff continued in Toyko where the Nikkei dived to a 19-year low of 9014.73. The trigger for the latest falls was a report from the Institute for Supply Management showing almost no growth in US manufacturing for the second successive month.