Tuesday evening business bulletin

Jul 1 2008 By Andrew Mernin

Fears over the economy and UK housing market saw the FTSE 100 Index plunge more than 2.7% into the red today.

Investors piled out of banking and financial stocks after Nationwide figures showed an eighth month of falling house prices.

And sentiment was knocked further after a survey revealed the lowest activity among manufacturers since the aftermath of 9/11, sending the Footsie plummeting 154.4 points to 5471.5 in mid-session trading.

Gains made in yesterday’s minor rally were wiped out as the grim economic news took its toll on blue chips, with just four left in positive territory.

The sell-off caused indiscriminate damage in the Footsie, although losses for heavyweight banks and miners in particular dragged the index lower.

Royal Bank of Scotland fell 12.25p to 202.75p, Barclays slipped 15.5p to 276p and HSBC fell 27p to 748.75p.

Financials were suffering following the dire house price data from Nationwide, with values falling by 0.9% in June leaving annual growth dropping at its fastest rate since the 1990s crash.

Manufacturing activity in June slumped to its lowest level since the aftermath of the 9/11 terror attacks, a survey revealed today.

The Chartered Institute of Purchasing and Supply’s (CIPS)/Markit manufacturing index fell to 45.8 - the lowest since December 2001 and a sign of industry contraction, with a score above 50 signalling growth.

Firms in the sector scaled back production to an extent not seen since December 1998 as they continue to struggle with a toxic combination of soaring input costs from oil and food products, as well as weakening demand.

Manufacturing jobs were also axed at the fastest pace since August 2005 as firms looked to cut costs, the survey showed.

The figures present a fresh headache for the Bank of England’s Monetary Policy Committee (MPC) as it attempts to tread a course between preventing recession and reining in inflation, which is currently above target.

Foreign servants working in the UK face exploitation by their employers, according to a survey released today.

The study of migrant domestic workers found reports of sexual and physical abuse and widespread reports of poor working conditions.

Oxfam said the workers, who were mostly women, were ``extremely vulnerable" and needed more help from the government.

The study found 70% of the workers were given no time off and more than 60% were not allowed out of the house without permission.

One in ten said they had been sexually abused by their employers and more than a quarter said they had suffered physical abuse.

Foreign servants working in this country are entitled to the minimum wage and public holiday.

But of those surveyed 70% said they earned less than £250 a month. Some 3% said they earned nothing at all.

The pound at 5pm was US$1.9930 compared to US$1.9910 at the previous close while the euro at 5pm was £0.7916  compared to £0.7910 at the previous close.