More than £75 BILLION wiped from FTSE 100 as shares plunge 300 points on fears of global financial crisis - 'It's a bloodbath'

It meant the index sank to 7,344, a level not seen since December last year. The pound also crashed and was down by about one per cent to 1.21 US dollars. Gold - a safe-haven in times of crisis - surged to a record high.

Spring Budget day was overshadowed by concerns from Europe over the health of several leading banks, including Credit Suisse which saw trading in its shares suspended as they collapsed by 25 per cent.

Back in the UK shares in insurance giant Prudential were down by more than seven per cent, Barclays also tumbled seven per cent and Standard Chartered fell by more than six per cent.

Fawad Razaqzada, a market analyst at City Index and FOREX.com, described the collapsing share prices of European banks as a "bloodbath".

He said: "Investors are panicking. It's a bloodbath.

"Concerns over another 2008-style financial crises have intensified.”

Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, said the growing banking crisis had taken an "ominous twist".

She added: “The fresh banking sell-off has taken hold as fears rise to the surface about the robustness of the sector with the shadow of the SVB collapse still looming large.

“With the US banking sector downgraded to negative by Moody’s nervousness is super-high and that’s spilt over into a hot mess in Europe.”

She told Proactive Investors: "There are worries that the European Central Bank may still opt for a large rate hike, despite the problems hard and fast monetary policy tightening has had on bond prices.

“The worry is that banks sitting on large unrealised losses in their bond portfolios might not have sufficient buffers if there is a fast withdrawal of deposits."The nervousness is palpable."

Switzerland-based Credit Suisse saw its share price tank to a new record low after its largest investor said it would not increase its stake.

Neil Wilson, chief market analyst at Finalto, warned that Credit Suisse is “too big to fail” amid concerns from investors that the bank could be “the next shoe to drop”.

Analysts suggested that the usual attention on today's Budget has slipped in the wake of SVB’s collapse and fears of contagion in the UK.

Victoria Scholar, head of investment at Interactive Investor, said: “All eyes were supposed to be on the Budget this week but the collapse of Silicon Valley Bank with concerns about financial contagion has superseded the famous red box.

“It has been a volatile week for financial markets as investors weigh up the negative economic impact from the bank’s failure versus the prospect of more accommodative monetary policy from the Bank of England and the Federal Reserve.”

Russ Mould, investment director at AJ Bell, said: “It would be nice to have a sense of calm across the markets following troubles earlier this week but it’s clear that investors remain nervous about what might be lurking in the shadows.”