Stock markets and US dollar drop, and bond yields rise, after US credit rating downgrade; EC cuts eurozone growth forecast – as it happened

Long-term US borrowing costs hit 18-month high over 5%, as bond market flashes warning signals'

• US credit rating downgrade could add to pressure on government debt

Economic risks are weighing on the US dollar today, reports Susannah Streeter, head of money and markets at Hargreaves Lansdown:

'Like a long weekend hangover, a headache of worry is seeping into sentiment today. The FTSE 100 has opened lower, as investors mull over the downgrading of the US sovereign credit rating on Friday.

Moody's stripped the US of its triple-A rating, citing the growing US fiscal deficit, and the higher borrowing costs the administration will be forced to pay. Given the pledge by Trump to cut taxes, it's feared the situation could deteriorate further. More of a sombre mood is expected on Wall Street when trading opens later, with futures indicating falls of around 1% for the S&P 500 and 1.3% for the Nasdaq.