London - Across-the-board falls in share prices Thursday accounted for a 5-per-cent drop in the Financial Times Share Index (Footsie) in London which closed at a 5-year-low.

Analysts said not only financial shares, but all sectors from from construction to mining and tourism, were affected by the downward trend fuelled by fears over a looming recession.

The Footsie closed down with a loss of 218.2 points at 3,861.4 points, dropping below the psychologically important 4,000 barrier.

Analysts said markets were nervous about recession indicators and the apparent continuing reluctance of banks to lend to each other.

"There is a lot of talking but little action," one analyst said.

Howard Davies, a banker and former head of Britain's Financial Services Authority (FSA) watchdog, said there was a realization on markets that "we have a galloping recession."

"Demand is simply slowing all over the globe," said Davies. Markets were operating in an environment of a "falling economy but not yet falling inflation," he said, increasing the pressure on central banks to cut interest rates. (dpa)