Stocks and sterling dive as Fitch labels fiscal challenge 'formidable'

UK stocks have tumbled sharply this morning after Fitch labelled Britain's fiscal challenge as "formidable".

At 10:50am, the FTSE 100 was 66.92 lower, or 1.32%, to 5,002.14. Lloyds Banking Group and Barclays were among the casualties, down 3.17% and 2.87% respectively. Tesco was also in decline, falling 2.94% on news its chief executive Sir Terry Leahy will retire after 14 years at the helm. Fitch Ratings said in a special report that "following an unprecedented economic and financial shock, the scale of the UK's AAA/stable outlook fiscal challenge is formidable and warrants a strong medium-term consolidation strategy - including a faster pace of deficit reduction than set out in the Apr...