The British pound fell to 1.8512 dollars, its lowest point since July 2006. The Bank of England is expected to cut interest rates to bolster economic growth. The slump in British currency is the latest indication of a gloomy global economic horizon.
It was the news governments across Europe have been dreading. The economies of France and Germany, and the euro zone as a whole, shrunk in the second quarter. The spectre of a continental recession is impossible to ignore.
Consumer price inflation rose to unexpected highs in July, making it the highest surge in 17 years. The housing crisis and escalating energy and food prices played a key role in stretching Americans' wallets.
Oil prices fell to $113 a barrel, their lowest level in four months, amid faltering global demand. The drop in prices is the steepest decline in decades, due to the increasing worries about global energy consumption and supply disruptions in Georgia.
For the first time in five months, the euro was trading at under 1.50 dollars, amid fears of a potential European recession. The drop followed official reports of an Italian economic contraction in the second quarter.
Royal Bank of Scotland, Britain's second largest lender, revealed a 691 million pound-first half loss due to a major writedown in risky assets. One of the biggest in British banking history, the loss is also RBS's first in four decades.
Fannie Mae reported a second-quarter loss of 2.3 billion dollars, more than three times analysts' estimates. The home finance giant has been struggling since the beginning of the subprime crisis, the worst in decades.
In an agreement with US financial regulators, banking giant Citigroup agreed to buy back tainted securities it marketed to thousands of investors for a cost of 7.5 billion dollars, applying further stress to the bank's already strained finances.