Much of the City is paralysed with uncertainty as the seesawing equities and foreign exchange markets leave bankers, investors and traders afraid to take actions they may regret tomorrow.

New issues have dried up and the number of companies listed on the Aim is falling for the first time since it was founded in 1995. Share prices are swinging wildly with little relationship to company performance as some hedge funds sell madly to cover redemption requests. Others are sitting on the sidelines until they know more about corporate earnings.