Fears of a world recession came back to haunt global markets, prompting some investors to buy gold and safe but extremely low-yielding government bonds.

The FTSE 100 backed down from Thursday's record highs as the pound rebounded on reports that the EU was working on proposals for a post-Brexit trade deal with Britain.

Sterling fell to a near four-and-a-half week low against the US dollar today, as reports of a Tory plot to topple UK Prime Minister Theresa May cast fresh doubt over her future.

The pound was heading towards 15-month highs against the US dollar following stronger than expected UK retail sales data.

The pound staged a recovery on Tuesday as weakness in the euro and dollar helped the UK currency shrug off weak services data.

European markets sunk into the red on Tuesday after North Korea ratcheted up tensions with the United States by firing a ballistic missile over Japan.

Sterling was wallowing at eight month lows against the euro, as investors continued to trade on news that the European Central Bank may start weighing plans to cut its stimulus programme.

Accusing the West of encouraging an “unconstitutional coup” in Ukraine, Vladimir Putin has said that Moscow reserves the right to use its military to protect Russians there but voiced hope it will not need to do so.

President Vladimir Putin has pulled his forces back from the Ukrainian border yet said Moscow reserves the right to use all means to protect Russians in Ukraine.

A petrol bomb was hurled at a house in Cork City where a couple and their eight children were living and yesterday the man who was convicted of the crime was put on a probation bond for a year.

A PROPERTY manager visiting Cork for a Christmas party woke up in a car outside a pub to find that his head had been shaved along with one of his eyebrows and yesterday he was awarded €10,000 in compensation for his psychological trauma.

ABOUT 4,500 Leaving Certificate students sat economics papers featuring very topical issues yesterday.

THE composing section of yesterday’s higher level Junior Certificate music paper hit the right chord with well-prepared students, according to Association of Secondary Teachers Ireland (ASTI) spokesperson Mary McFadden.

PUBLICANS in Kerry are to defy the Government’s smoking ban on January 1.

SMOKING in the workplace could be costing the Irish economy as much as 5m per day, research has shown.

Smoking costs the Irish economy up to €5m a day in sick leave, increased absenteeism and lost productivity, it was claimed today.

SOME 56 babies are estimated to be dying each year as a result of smoking by their mothers, a report by the Economic and Social Research Institute has found.