...the main business headlines..........
Recession fears drive markets lower
As signs grew that bank bail-outs around the globe offer too little too late, markets suffered renewed falls. The FTSE 100 opened five per cent lower after the S&P index fell more than nine per cent in the US, its biggest daily drop since the market crash of 1987. In Asia there were also record declines, with the Nikkei down 11.4 per cent. Retail sales in the US fell 1.2 per cent in September, the sharpest drop in three years and Ben Bernanke, the chairman of the Federal Reserve warned investors that the economic recovery would "not happen right away".
Peregrine Worsthorne: financial hacks as guilty as the bankers 
America enters a new Depression
Oil collapses below $75 a barrel
As commodity prices fell further yesterday, oil slid below $75 a barrel, reported the Financial Times. Nymex November West Texas Intermediate slumped to a new low of $74.54 as Opec said it would need to reduce its output to 31.3m barrels a day in the first quarter of next year to "balance the market". Currently it is pumping 32.2m barrels per day. Analysts said they expect the oil price to move back down towards $50 per barrel if output is not reduced "significantly", and lowered their forecasts for next year.
Book review: a delicate dance with the Russian bear
China growth questioned
Investors took fright yesterday at a potential slowdown in Chinese growth, said the Independent. Rio Tinto's finance director, Guy Elliott, pointed to a slowdown in demand, which he didn't expect to improve until 2009. His remarks caused commodity prices to slide, with oil falling five per cent to a 13-month low and metals like copper, aluminium and nickel all slumping. The sell-off comes as economists lower their forecasts for China. The IMF predicts 9.7 per cent growth there this year and 9.3 per cent next year.
Why China covered up baby milk scandal
Democracy has led us to the brink of collapse
Banks free to pay dividends
The Treasury is about to relax a five-year ban on the recently nationalised banks paying dividends, said the Times. At the weekend the three banks involved in the bail-out, Royal Bank of Scotland, Lloyds TSB and HBOS agreed to the ban on a payout to shareholders while the taxpayer held a "significant stake". Officials revealed that the ban was in force for a year, but could then be lifted if the banks made big repayments. Bankers said that this was a "climbdown" from the Treasury's initial position during weekend rescue talks.
RBS: a failure made in Scotland
People: RBS's Fred gets shredded
Unemployment rise most rapid since 1990 recession
The number of people unemployed rose at its fastest pace since the last recession in the early 1990s, reported the Guardian. In the three months to August, the jobless total on the Labour Force Survey measure leapt by 164,000 to a total of 1.8m, the highest level for a decade. The unemployment rate rose from 5.2 per cent to 5.75 per cent. The "horrendous" figure prompted concerns that unemployment would rise to 2m by Christmas, since the period concerned comes before the lastest phase of the financial crisis.
The danger of a banker with a power complex
Sarkozy challenges Brown role
Gordon Brown's part in averting global financial meltdown was challenged yesterday by French President Nicolas Sarkozy, reported the Independent. The two leaders clashed over the praise Brown has received for the UK plan to inject funds into its banking system, which was later replicated around the world. Sarkozy told a European summit in Brussels that Europe had "shown leadership" in the crisis, with plans "worked out in the EU". The two are agreed, however, on the need for a global summit on the issue.
Daniel Hannan: Euro federalists spot credit crunch opportunity
...in brief..................
Iceland lowers rates and M&A collapses
Iceland has cut rates by 3.5 per cent to 12 per cent in response to "unprecedented turbulence" in world markets, which has already seen the country's three biggest banks fall under state control. Rates had been at 15.5 per cent since April, in an effort to control inflation…………
Pearson said full-year earnings would buck the trend and come out near the top of analysts' estimates. The publisher pointed to a strengthening dollar - the group makes 60 per cent of its revenue in the US - and growth at the Financial Times as being key…………
Switzerland joined the list of countries with bank bail-outs, after its government took an indirect 6bn Swiss Franc stake in UBS and Credit Suisse, using funds from private investors and the Qatar Investment Authority. UBS shares rose in Thursday trade, Credit Suisse was down slightly............
Legal & General moved to reassure the markets that its capital strength is high, with a surplus of £2.9bn at the end of September. That is a £3.4bn fall from the end of June, but the insurer said that a further 30 per cent fall in equity markets from the end of September would only reduce the figure to £2bn............
The auditors of collapsed tour operator XL Leisure are to be investigated by the industry watchdog, reported the Guardian. BDO Stoy Hayward is to be examined by the Accountancy and Actuarial Discipline Board in relation to its audit of the company............
Mergers and acquisitions worth $90bn have collapsed since September 1st, reported the Times. Market turmoil has undermined the ability of companies to complete deals, with Experian's planned sale of price comparison site Price-Grabber the latest to be scrapped…………
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