Despondency deepened this morning over the global economic outlook and the likelihood of a US recession, as Europe's leading blue-chip stock indices plunged and financial stocks took a fresh battering.

Europe's three largest stock markets lost almost as much in value this morning as they did over the whole of last week, in which 5% was wiped off the value of each of the indices as the threat of a severe slowdown and prolonged pain in the credit markets sparked a heavy sell-off.