Euphoria surrounding a €100bn deal to rescue Spain’s banks gave way to cynicism today as the gravity of the eurozone’s woes weighed on the minds of investors.

The British Government today warned that further rises in unemployment were expected before the summer as figures showed those claiming jobseeker’s allowance soared to the highest level since Labour came to power in 1997.

The Bank of England kept UK interest rates on hold at 5% today – as further signs of a booming housing market raised the prospect of a hike next year.

The booming UK housing market will slow down gradually and avoid a 1990s-style crash, an economist predicted today.