The pound remained under pressure this morning amid the latest signs of the worsening economic crisis across the globe which sent Asian markets plummeting following a day of steep losses on Wall Street.

Sterling fell further against the dollar to $1.4798 this morning, continuing yesterday's 5 per cent drop to $1.4839 - the biggest one-day fall against the dollar since Black Wednesday in 1992, when the pound was ejected from the European Exchange Rate Mechanism.

In early trading, the FTSE was down more than 50 points at 4,013.85. Yesterday, the market lost 249.56 points to close at 4,038.45, with not one stock ending higher.

Mining stocks were depressed by the tumbling oil price, which fell to a three-year low, amid persistent fears about waning demand from struggling economies.

The price of crude dropped to less than $48 a barrel in trading in Asia. At an emergency meeting in Cairo this weekend, leaders of the Organisation of Petroleum Exporting Countries (OPEC) decided against cutting production.

Rio Tinto was the biggest faller, down 88p, or 6.18 per cent, at 1337p.

Stocks also fell across the Asian markets.

Japanese shares in the Nikkei 225 Index, which had weathered last week’s barrage of bad news in relatively good shape, collapsed 6.4 per cent in a session that saw the 8,000-point line breached for the first time since mid-November.

Hong Kong's Hang Seng fell 5 per cent and Korea’s Kospi index lost 3 per cent drop.

Only the Thai stock exchange ended the day higher. The Constitutional Court’s decision to disband the government was taken by investors as a sign that the political crisis that has brought the country’s tourist economy to an embarrassing standstill may be nearing a solution.

The steep falls across Asia follows a torrid day's trade on Wall Street where the Dow Jones industrial average closed down 679.95 points to 8,149.09 after it emerged that the US economy has been in recession since December 2007.

The analysis from National Bureau of Economic Research said that the current downturn will last until the middle of next year, proving the most severe slump since the recession of 1981 to 1982.

The forecast was among factors that pushed the oil price to this morning's new low.

The fall in sterling follows a slump in manufacturing in the UK and across the world, and comes as the markets are betting on another big cut in interest rates from the Bank of England on Thursday.

Central banks across the world are facing renewed pressure to deliver more interest rate cuts and, overnight, the Reserve Bank of Australia reduced borrowing costs for the fourth month in a row, by 1 per cent to 4.25 per cent.

The Bank of England's Monetary Policy Committee (MPC) will meet on Wednesday and Thursday this week to decide on the interest rate, which was cut by a steeper than expected 1.5 per cent to 3 per cent last month.

Economists are predicting the MPC will announce a 1 per cent reduction to 2 per cent on Thursday. The European Central Bank is also expected to cut borrowing costs this week.

In Japan, the yen has begun to climb sharply again, lurching into the Y93 zone against the US dollar and once again threatening to erase profit margins at Japan’s exporters.

Currency traders said that the yen had now reached the point where the Japanese authorities would once again be considering intervening to weaken the currency.

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