PRESS DIGEST - Financial Times - July 16

Financial Times

FED WARNING BATTERS SHARES

Worries about the US economy helped drive down the FTSE 100 to its lowest level for three years as Ben Bernanke, the chairman of the US Federal Reserve, signalled "numerous difficulties ahead." London's main market fell to its lowest since October 2005, falling 2.4 per cent to 5171.9, with banking stocks hit hard. Royal Bank of Scotland (RBS.L) fell to a ten-year low of 167.3 pence, and HBOSHBOS.L dropped 4.4 per cent to 260 pence. Mr Bernanke said declining house prices, strains in financial markets, higher oil prices and a weaker labour market were all affecting the outlook.

INFLATION HITS 16-YEAR PEAK BUT UNIONS DISMISS CALLS TO CURB PAY