Pound drops as Bank of England deputy governor sees lower inflation ahead – as it happened

Rolling coverage of the latest economic and financial news

Although European stock markets certainly aren't in a full-blooded plunge, yet anyway, the main indices are all in the red - following losses across Asia overnight (see 7.21am).

The European Stoxx 600 is at a one-month low, as investors fret about events in the Middle East.

FTSE 100: -36 points or -0.46% at 7842 points

Germany's DAX: -152 points or -0.9% at 17,681 points

France's CAC: -45 points or -0.6% at 7,976 points

Italy's FTSE MIB: -345 points or -1% at 33,533 points

Wall Street is heading for losses when it opens in four hours, too, with the S&P 500 down 0.5% in pre-market trading.

Asian markets bore the brunt of the breaking news of a retaliatory attack on Iran by Israel, also sending Dow futures sharply lower and resulting in further spikes in gold and oil prices.

US markets will not have the opportunity to react directly to the developments until later, but the escalation will put pressure on the main indices, which were already lining up for a weekly drop. The Dow Jones managed a wafer-thin gain on Thursday, whereas the Nasdaq and S&P500 continued on a downward trend which is eroding the heady gains made over recent months.