IMF head Lagarde gives warning over world economy

World stock markets have dropped sharply after a series of grim warnings over prospects for the global economy.

In Europe, the UK FTSE 100 was down 4.7%, while France's Cac-40 fell 5%. In the US, the Dow Jones fell 3%.

Mrs Lagarde told a news conference at the IMF's annual meeting in the US that the path to recovery is narrower than when developed economies first sank into recession.