Shares in Yell plunged 26 per cent as a dividend cut and warning of “considerable” pressure from tougher economic conditions fuelled investor worries about the directory company’s ability to service its debt.

The 55p drop to 154p marked the shares’ third double-digit one day decline since April last year and left Yell with a market capitalisation of just £1.2bn, far below its net debt of £3.8bn.