Shares under pressure again as US economic woes pile up

UK shares are under pressure again across Europe after yet more disappointing economic news from the US overshadowed some better data here.

The FTSE 100 fell 60 points, or 1.1%, to 5141.6 points dragged down by overnight losses on Wall Street after disappointing news on personal income and spending adding to fears the pace of the recovery will slow further.

That added to the increasingly downbeat newsflow from the US where economic growth for the second quarter was revised lower on Friday and pushed shares 140.92 points lower to 10009.

Investors are now bracing themselves ahead of the minutes from the US rate-setting Federal Open Market Committee due later, important manufacturing data tomorrow and key jobs numbers on Friday.

In Asia, news the Bank of Japan's operation to weaken the yen has failed pulled Tokyo shares down 325.2 points to 8824.06, its sharpest one day fall in months.

Back in the UK, a new poll showed the better than expected economic performance so far this year has lifted consumer confidence.

The Bank of England also reported that mortgage lending edged higher in July although levels remain well below the average monthly level over the previous 17 years.

Howard Archer, chief UK and European economist at IHS Global insight, said at 48,722 the level of mortgage approvals is also well below the 70,000-80,000 level that has been consistent with stable house prices in the past.

On the company front, economic worries were taking their toll as services group Serco dropped 3% or 18p to 579p amid growing concern that government cuts will hit its business. Analysts at Bank odf America Merrill Lynch downgraded their rating to 'neutral' from 'buy' saying the government spending review may lead to a fall in revenue at the group.

Miners were also weighed down by concerns about the global economic outlook with Lonmin down 35p at 14.93 and Xstrata 22.9p lower at 994.1p