George Osborne's efforts to ease Brexit concerns 'shattered' as markets plunge
Chancellor George Osborne's efforts to ease Brexit concerns were "shattered" after global markets plunged into the red and more than £40 billion was wiped off the value of Britain's biggest companies.
The FTSE 100 Index plunged below the 6,000 mark, slipping 2.6% to 5,982.2, despite Mr Osborne briefly stemming losses on the London market when he offered assurances that the UK is "about as strong as it could be to confront the challenge" of leaving the EU.
However, his comments were not enough to dampen fears on global financial markets, with Germany's Dax plummeting 3% and the Cac 40 in France plunging 2.9%.
Across the Atlantic, the Dow Jones Industrial Average was also trading 1.4% lower.
On the currency markets, sterling plunged to a fresh 31-year low of 1.3151 US dollars, before rallying back to a 3.4% fall to 1.321 US dollars. Yields on 10-year government bonds also slid below 1% for the first time.
Joe Rundle, head of trading at ETX Capital, said: "Whatever bounce Osborne delivered, it's gone now as markets are getting slammed again. Today's US open shattered the peace. Wall Street opened sharply lower, with all 30 Dow stocks in the red.
"Cable has hit fresh 31-year lows, shedding 4% on the day. After Friday's freefall it doesn't sound much but these moves are massive in a historical context and it looks like nothing but down for sterling."
Heavyweight financial stocks, housebuilders and travel firms bore the brunt of the sell-off on London's premier index, with low-cost carrier easyJet sitting at the top of the biggest fallers after warning over profits.
Shares in easyJet were down 22% after the firm said it will take a £28 million hit following two months of turbulence and warned that Brexit would have a negative impact on the airline.
It flagged strikes in France in May and June and severe weather leading to more than a thousand cancellations, with the EgyptAir tragedy also denting demand.
Royal Bank of Scotland briefly plunged to its lowest level since 2009, before finishing more than 15% down at 174.3p.
RBS, which is 73% owned by the taxpayer, and Barclays saw their shares suspended for five minutes as automatic circuit breakers sprung into action when they dropped by more than 8%.
Shares in Barclays finished 17% lower at 127.2p.
Housebuilders were also the victim of a sharp sell-off, with Barratt Developments falling 19% and Charles Church-owner Persimmon slipping 13%.
However, precious metal miners were in the ascendancy as investors headed for safe havens, with gold miner Randgold Resources and silver miner Fresnillo lifting 9% and 7% respectively.
Away from the top tier, the FTSE 250 - seen as a better barometer of UK business than the FTSE 100 - slumped nearly 7% to 14,967.86.
Meanwhile, shares in Foxtons crashed 22% after the estate agent issued a Brexit profit warning.
The estate agency, which dropped out of the FTSE 250 in December, took a tumble after it said the upturn it had expected in the second half of the year is "now unlikely to materialise", adding that annual earnings will be "significantly lower" than in 2015.