Global markets are witnessing a "psychological milestone" in European junk rated companies after their rate of default almost doubled to over 10%, according to rating agency Standard and Poor's.

The figures, which measure defaults in western European companies in the 12 months to the end of June 2009, have increased dramatically from the end of 2008, when the rate was at 5.3%. According to a report from the rating agency's analysts yesterday, the level of defaults is projected to accelerate to 11.7% to 14.7% by the end of the year.