Update: FTSE slumps 2.5% as US data compounds commodity woes

The FTSE 100 has dropped 2.5% this afternoon as worse-than-expected US retail sales data darkened investors' moods further this afternoon.

US retail sales dropped 0.9% in December, far worse than the 0.1% drop that had been expected, while November figures were also revised down. The data also showed little sign that lower fuel prices had encouraged consumers to increase spending. Though some counselling the figures were simply a sign of spending having been brought forward to the Thanksgiving season, investors reacted badly. The FTSE 100 extended losses to stand down 2.5% on the day at 6,385 shortly after 15:00, while US stocks also opened lower. Earlier, the UK's blue chip index dropped 1.5% to 6,445 in early tra...