Global stocks and government bonds tumbled as the boost wore off from the Bank of England’s intervention on Wednesday to support UK government debt markets.

Wall Street’s benchmark S&P 500 dropped as much as 3 per cent, touching its lowest level since November 2020, before recovering to close 2.1 per cent lower on Thursday. The Nasdaq Composite, which is dominated by tech groups that are regarded by investors as particularly sensitive to higher interest rates, tumbled 2.8 per cent.

Investors have become increasingly concerned about the impact of high rates and the prospects for global economic growth since the US Federal Reserve and a host of other central banks raised rates last week. Data on Thursday showed the number of Americans filing for unemployment benefits over the past week hit its lowest since April. That weighed on Wall Street from the opening bell, as a tight labour market carries risks of inflation becoming entrenched.