Liquidity Looked in the Mirror but Insolvency Stared Back

FRESH concerns that the US economy is hurtling towards recession took its toll on UK investor sentiment last night, with the FTSE100 index of Britain's leading shares ending the session 1.6 per cent lower.

The benchmark index spent much of the day near to its opening mark, but closed 91.7 points lower at 5,787.6 after US retailer Best Buy cut its profits outlook for 2008 and a survey showed US consumer confidence has fallen to a 16-year low.

News that banking behemoth Citigroup had suspended investor withdrawals from a credit hedge fund to give it a chance to 'stabilise' weighed on UK banking shares.

Ahead of their full-year results statements towards the end of the month, Royal Bank of Scotland tumbled 2.8 per cent to 350.75p and Edinburgh-based rival HBOS slumped 3.6 per cent to 608.5p. read more