Financial markets on both sides of the Atlantic witnessed a fresh and aggressive sell-off on Wednesday, driven by fears over inflation in the US and Europe and heightening worries that the recent correction in asset prices is sharpening rather than ending.

The Dow Jones Industrial Average had its worst one-day points drop since March 2003, tumbling 214 to 11205.61, or 1.9 per cent, while Europe?s main bourses all suffered falls of about 3 per cent.