When the Bank of England slashed interest rates to their lowest level in 53 years on Thursday, the members of its monetary policy committee were probably not expecting the market to fall almost 6 per cent. The fact that it did says much about the mindset of investors right now.

Instead of focusing on the positives of the MPC's dramatic move, the market decided it smacked of panic and showed just how sick the UK economy had become. Some traders said it demonstrated that the MPC was powerless to stop the UK sliding into a deep recession.