Ratings agency Standard & Poor's slashed Britain's credit rating today while global markets plunged into the red and more than £40 billion was wiped off the value of Britain's biggest companies.

Standard & Poor's had been the only major ratings agency to retain Britain's top notch triple-A rating following last week's Brexit vote.

But today it cut that rating by two notches to AA and warned further downgrades could follow.

Alongside risk's to the country's economy following that decision, the agency cited the possibility of a new Scottish independence referendum for today's decision.

Standard & Poor's said in a statement: "The negative outlook reflects the risk to economic prospects, fiscal and external performance, and the role of sterling as a reserve currency, as well as risks to the constitutional and economic integrity of the UK if there is another referendum on Scottish independence."

Today, the FTSE 100 Index plunged below the 6,000 mark, slipping 2.6 per cent to 5,982.2, despite Chancellor George Osborne briefly stemming losses on the London market when he offered assurances that the UK is "about as strong as it could be to confront the challenge" of leaving the EU.

However, his comments were not enough to dampen fears on global financial markets, with Germany's Dax plummeting 3 per cent and the Cac 40 in France plunging 2.9 per cent.

Across the Atlantic, the Dow Jones Industrial Average was also trading 1.4 per cent lower.

On the currency markets, sterling plunged to a fresh 31-year low of 1.3151 US dollars, before rallying back to a 3.4% fall to 1.321 US dollars. Yields on 10-year government bonds also slid below 1 per cent for the first time.

Joe Rundle, head of trading at ETX Capital, said: "Whatever bounce Osborne delivered, it's gone now as markets are getting slammed again. Today's US open shattered the peace. Wall Street opened sharply lower, with all 30 Dow stocks in the red.

"Cable has hit fresh 31-year lows, shedding 4 per cent on the day. After Friday's freefall it doesn't sound much but these moves are massive in a historical context and it looks like nothing but down for sterling."

Heavyweight financial stocks, housebuilders and travel firms bore the brunt of the sell-off on London's premier index, with low-cost carrier easyJet sitting at the top of the biggest fallers after warning over profits.

Shares in easyJet were down 22 per cent after the firm said it will take a £28 million hit following two months of turbulence and warned that Brexit would have a negative impact on the airline.

It flagged strikes in France in May and June and severe weather leading to more than a thousand cancellations, with the EgyptAir tragedy also denting demand.

Royal Bank of Scotland briefly plunged to its lowest level since 2009, before finishing more than 15 per cent down at 174.3p.

Meanwhile, shares in Foxtons crashed 22 per cent after the estate agent issued a Brexit profit warning.

The estate agency, which dropped out of the FTSE 250 in December, took a tumble after it said the upturn it had expected in the second half of the year is "now unlikely to materialise", adding that annual earnings will be "significantly lower" than in 2015.

Additional reporting by the Press Association.