The FTSE 100 closed down almost 1.8% at 7627, as the combination of higher-than-forecast inflation and US default fears led to the biggest sell-off of London stocks in months.
The ONS’s inflation figures shocked the City again this morning, coming in much higher than expected for the third month in a row, at 8.7%.
Economists had expected inflation to decline to 8.2%.
Meanwhile, the FTSE 100 is trading lower as global markets worry about progress on US debt ceiling negotiations.
Click through the graphs to see how markets have reacted to the inflation reading and latest debt ceiling developments.
