The FTSE 100 Index fell by 2.5% today as fears over the crunch in credit markets continued to hound investors worldwide.

Financial services firm Old Mutual bore the brunt of sterling’s strength today as it revealed a 12% drop in half-year operating profits to £782m (€1.1bn).

UK financial services group Old Mutual vowed to press ahead with a £3.3bn (€4.9bn) offer for Skandia today, despite failing to win over the insurer’s board.