FTSE slumps 2% as US treasury yields hit two-year high

The FTSE has tumbled as much as 2% as US ten-year yields touch two-year highs in expectation of an imminent slowdown of the Federal Reserve's quantitative easing programme.

Better US data has raised expectations the Fed will begin tapering QE purchases next month, sending bond yields higher and equities lower. A report on the US labour market this morning showed weekly initial jobless claims are at their lowest level in almost six years. That pushed the US 10-year bond yield up to 2.819% this afternoon, the highest it has been in two years, according to Tradeweb data. Benchmark bid-yields last closed above this level at 2.858% on 29 July 2011. The shift in sentiment had a knock-on effect on the impacted the UK market, with the FTSE 100 dropping 1.9...