UK airlines are expected lose at least £130 million ($200 million) a day in revenues as a result of the volcanic ash-linked disruption, according to the International Air Transport Association (IATA). IATA, the industry’s governing body has said. Said its members would also lose further money as a result of having to augment expensive contingency plans.

All UK flights in England and Wales were grounded on Friday Those airspace restrictions will remain in place until further notice, with widespread restrictions now in place across Europe.

Research the Royal Bank of Scotland (RBS) has disclosed that almost three quarters of small and medium sized companies (SMEs) have suffered from late payments in the past year, leaving them burdened with £63 billion pounds in unpaid debt. The average amount of bad debt being written off by SMEs doubled in 2009 to £2,529 pounds.

According to a recent report by the UK Institute of Directors, At least £500 billion will need to be invested on infrastructure in the next decade in order for the UK to remain competitive, according to the Institute of Directors (IoD).

The IoD said that despite the fiscal deficit, public spending on energy, transport, and water and should be implemented as it is vital to economic growth.

The group of company bosses suggested that the proceeds from re-privatising the banks, which could be over £50 billion, should be spent on new infrastructure. In 2009 just £7.8 billion was invested on infrastructure. The IoD said that at least £130 billion should be spent on transport projects and that £300 billion will be needed for energy infrastructure, including investments in energy efficiency measures for housing.

Global credit checking group Experian has said UK banks are lagging behind their U.S. counterparts in terms of their willingness to lend to consumers in the six months to the end of March. Experian blamed lack of credit and consolidation in the financial sector for a seven percent fall in organic revenue at its main credit services operations in the UK and Ireland. Shares in the FTSE 100 listed company fell 18.5 pence to 616.5 pence, after it said that its main business of performing credit checks in developed economies had put a lid on revenue improvement

Britain’s biggest retailer Tesco will reveal record profits of around £3.3 billion pounds this week, on global turnover that will breach the £65 billion pound mark. This figure, which will represent an increase of 12 percent on 2009, and double the combined profits of competitors Asda, Morrisons and Sainsbury’s.

The John Lewis Partnership, which is seen as a barometer of British retailing, today announced that sales grew 10% in the week to 10 April, compared with the same period a year ago. The renowned employee-owned department store said customers are still spending despite the uncertainty over next months’ election. The firm has been outperforming its rivals this year and said it is optimistic that strong sales will continue. However, sales at its Waitrose supermarket chain fell 16.7% to £80 million in 2009. However, compared to the same period last year, sales surged 10.7%, highlighting Waitrose’s current position as one of the UK’s fastest growing supermarket.

Wal-Mart Stores Inc.’s UK supermarket arm Asda Group Ltd have announced their aim to become the U.K.’s number one non-food retailer in five years, Asda set out plans for a huge expansion of its standalone general merchandise stores, with plans to increase the number of its ‘Asda Living’ with an average size of 28,000 square feet stores six-fold,, to 150 in five years time, up from 25.

Leading UK Energy provider Eon UK has predicted that European Union regulations are liable to expose Britain to energy shortfalls. The energy firm, which is part of German utility E.ON, has said that EU rules are forcing its oil-fired power station at Grain in southeast England to shut down. The announcement comes as the UK Business Council for Sustainable Energy (BCSE) suggested Britain would need to increase its generating capacity by more than 40,000 megawatts to maintain power supply when output from renewable sources recedes. The BCSE said Britain is planning to install 8,000 offshore wind turbines over the coming decade.

Mobile phone operator Orange, have announced the signing of a deal with BT intended to provide an improved high-speed Internet service to its customers by abandoning its fixed-line network. The company will now compete directly with market leaders Virgin Media and TalkTalk, in a move that could lower charges. The deal with BT will place Orange in the same position as Vodafone who currently offer their customers broadband services using BT’s network.

Dreams, the bed and mattress retailer, have announced an increase in operating profits of 36 percent to £18.4 million pounds for 2009. Latest figures released by the company show sales rose by 23 percent to £280 million pounds. The 240-store chain has plans to open up to 450 stores in the coming years.

On the FTSE Royal Bank of Scotland added 5.11 percent to their shares, making for the best performance of the session. The increase came as a result of positive broker comment from Bank of America Merrill Lynch. Competing UK banks did less well, with Barclays Bank dropping 2.56 percent on the news that the SEC has accused Goldman Sachs of civil fraud in relation to activities revolving around mortgage investments.

The U.K.’s second-largest software company Autonomy saw their shares drop to their lowest level for two months after issuing a pessimistic trading

Shares in British Airways understandably dropped 1.9 percent under a cloud of dust and ash.

The pound continues its slow recovery, despite closing down at $1.5396 before the weekend, while closing slightly up against the Euro at 1.140.

U.K. stocks retreated from a 22- month high before the weekend, falling 81.05 points to 5743.96 after having swung between gains and losses at least eight times on Friday. The FTSE 100 is heading for a seventh consecutive week of gains, the longest winning streak since July,

Bank of America (BoA) has returned to profit, reporting a net income of $3.2 billion (£2.1 billion) for the first quarter of 2010, compared with a $194 million loss in the previous quarter. However figures show a drop in profits of 24% than f the same period a year ago. The US bank said record sales and trading activity at its capital markets arm – including acquisition Merrill Lynch – had driven the latest results.

BoA also announced that they were also setting aside less money to cover anticipated losses on bad loans.

As was to be expected the Dow Jones Industrial Average took a step back on Friday, down 123 points to 11.018.66 while the NASDAQ Composite also lost some ground, down 34.43 points to close on 2,481.26.

Goldman Sachs has been accused of misleading their investors about subprime mortgage products before the US housing market collapsed.

The accusations came from the US Securities and Exchange Commission who charged the bank with failing to disclose crucial information about a synthetic collateralised debt obligation (CDO) product that it structured, which was closely linked to the performance of the residential mortgage-backed securities market. The regulator said that Goldman allowed Paulson & Co, a hedge fund, to influence the portfolio selection process while hedging investment against the CDO.

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Tags: ASDA, Ash, Autonomy, Bank, Bank of America, Banking, Barclays Bank, British airways, British Economy, Credit Crunch, Dow Jones, Dreams, Economics, Economy, Eon UK, Experian, Financial News, FTSE, Goldman Sachs, International Air Transport Association, John Lewis Partnership, Money, Money Markets, Morrisons, Mortgage, Mortgages, NASDAQ, Orange, Retail, Royal Bank of Scotland, Sainsbury, Stock Markets, Stocks and shares, subprime, TalkTalk, Tesco, UK airlines, UK Banks, UK Economy, UK government, UK Institute of Directors, UK Recession, Virgin Media, Vodafone, Waitrose, Wal-Mart Stores Inc

Under threat of the first nationwide strike by signalmen in 16 years, Network Rail announced on Friday night that it would meet next week at conciliation service Acas to discuss two separate disputes with the Rail, Maritime and Transport Union (RMT) and the TSSA, which represents managerial grades. The RMT is already threatening to strike over a proposed restructure of Network Rail’s maintenance operations which could lead to the loss of up to 1,500 jobs. However there are also worries over potential strike action by signalers in several areas of the country. The Acas talks will take place on either Monday or Tuesday.

In the air, British Airways have announced that their contingency plans for the first day of a three-day cabin crew strike have gone "extremely well".

A spokesman for BA said that according to their program, more than 65% of passengers would reach their destinations, with 1,157 staff working and some canceled flights reinstated. However the Unite union, representing the striking crew members has speculated that only a third of BA’s normal flights took off, with 125 out of its 250 planes grounded.

Another four-day strike is planned for 27 March in the pay and conditions row.

Within the next few days Chancellor Alistair Darling is expected to endorse plans for a global tax on certain financial institutions. These are institutions that are likely to pose a "systemic risk" by being dependent on government insurance schemes to stay afloat. Darling us expected to use the budget announcement to detail his backing of the proposals, with his key recommendations being that government revenue raised should go to national governments rather than an insurance scheme, which he believes would encourage banks to take more risk on lending and expansion. Darling’s views are similar to those expressed recently by Dominique Strauss-Khan head of the International Monetary Fund (IMF), who encouraged Europe to establish a system of orderly bankruptcy for cross border banks which would be less dependent on insurance schemes to fund bailouts.

In a recent survey conducted by Small Business Britain Entrepreneurs it was revealed that 40 per cent of small and medium, sized business enterprises (SMEs) would like to see a fall in employers’ national insurance contributions. In addition over 45 per cent would like to see banks to offer better rates to smaller firms. All in all they have called for Chancellor Alistair Darling’s budget to support small and medium-sized businesses, while at the same time, according to an unrelated survey small and medium-sized businesses are reported to be gaining increased confidence that the UK’s economic recovery looks likely to continue. The HSBC’s Global Small Business Confidence Monitor has reported that over three-quarters of SMEs now expected steady or increasing growth over the next six months

On the downside, the recent severe spell of weather has reportedly caused losses of around £7 billion pounds to SMEs. A survey showed that nearly two-fifths of those taking part stating that the harshest winter in decades had forced them temporarily cease operations, whilst more than forty percent said that weather conditions had cause some form of disruption to their business. Just less than a quarter of the firms surveyed announced that had not been affected by the severe weather in January.

Recent figures published today by the Society of Motor Manufacturers and Traders (SMMT) revealed that UK car production in February increased by almost two thirds against the same month in 2009, representing the fourth consecutive month that output has seen a year-on-year increase.

The SMMT announced that close to 100,000 cars came off the production line in February, with the majority going for export. In addition, around 10,226 commercial vehicles were also produced in February. A spokesman for the SMMT said the scrappage scheme continues to boost demand and production. The ‘cash for bangers scheme is due to expire at the end of this month with the SMMT predicting that the industry will be affected by the scheme drawing to a close.

Clothing retailer Next are expected to announce in their full year results due out on Wednesday that it has beaten many of its high street rivals. Pre-tax profits are predicted to have risen by £66 million pounds to £635 million pounds. Other companies due to release their results this week include supermarket giant Sainsbury, with their fourth-quarter trading figures due out on Thursday.

The pound continues to fall sharply against the dollar and the Euro, with the fall not being helped by a Bank of England (BOE) policymaker predicting that the UK could yet fall back into recession. On that piece of optimistic news the pound fell against the dollar, to $1.503. The pound fell against the Euro to 1.100. The prediction of the chance of double-dip recession taking place came from a BOE Monetary Policy Committee member Andrew Sentance.

On the FTSE, Banks were the biggest risers, with Barclays, Royal Bank of Scotland and Lloyds Banking Group all on the up.

Partially state owned, Lloyds announced a return to profitability in 2010 after two years of heavy losses. Their recovery was helped by lower than expected bad debts and tight cost controls. On the news shares in Lloyds Banking Group s rose sharply after the bank announced that they had succeeded in reserving losses of £6.3 billion ($9.5 billion) in 2009

Energy shares were also on a high with BP and Royal Dutch Shell both among the early risers.

Meanwhile the FTSE was continuing to rose, aided by news that Lloyds Banking Group said it would return to profitability in 2010

The FTSE 100 index finished for the weekend at 5,650.13, after hitting a 21-month closing peak on Wednesday.

On Wall Street before the weekend close, the Dow Jones was still on the rise, this time by 83 points to close on 10741.98. The NASDAQ took a little dip, after enjoying a good week. It fell four points to 2374.41.

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Tags: Acas, Alistair Darling, Bank, Bank of England, Banking, Barclays, British airways, British Economy, Dow Jones, Economy, Employment, Financial News, FTSE, Global Small Business Confidence Monitor, HSBC, International Monetary Fund, Lloyds Banking Group, Maritime and Transport Union, Monetary Policy Committee, NASDAQ, national insurance, Network Rail, Recession, Retail, Royal Bank of Scotland, Royal Dutch Shell, Sainsbury, Small Business Britain Entrepreneurs, Society of Motor Manufacturers and Traders, UK Economy, UK government, Wall Street

It came as no big surprise to anybody when the Bank of England (BOE) announced that they will be holding interest rates at their record low of 0.5%, and for the twelfth consecutive month.

The BOE’s decision gained a consensus of approval by UK economists, who pronounced, individually and collectively that rises in the cost of borrowing could set the UK’s fragile economic recovery back into the red.

The announcement that the bank will be standing firm on the amount of money that will be pumped into quantitative easing program (QE) programme was also met with a similar apathy.

BOE governor Mervyn King has long since made clear his opinion on increasing interest rates raising QE quotas, and all the rest of the UK’s financial programs by simply stating that that it was “far too soon” to make any changes to the status quo.

Sterling has now dropped in value for six consecutive trading days, with the bulk of opinion on the Pound’s increasingly weak position being because of speculation that the forthcoming general election is liable to see a hung parliament which translates to a government that will be too weak to mend the UK’s financial problems. Since the beginning of 2010, the pound has dropped by seven percent against the dollar, reaching a ten month low of $1.4783 on March the 2nd. The pound closed on Thursday on $1.5051 while the Euro was stabilising at 1.1078.

Financial Service Institute (FSA) chairman Lord Turner has voiced his opinion that that the size of banks was also not the main reason behind the economic turmoil, and even some of the UK’s smaller financial institutions could have been pronounced equally guilty of “over-exuberant lending” and taking “risky short-term wholesale deposits, Turner explained “Everyone was seduced by the long boom and were often led astray in the past by complicated mathematical rules. The Bank’s regulators were the ones who failed to notice the inherent weakness in that position.”

The FSA chairman also went on to explain that when the time comes to add up the cost of bailing out the financial services industry at the height of the global financial crisis may in the end turn out to be a lot less than first predicted.

“It is quite possible that the total overt costs of the UK’s big bank rescues may not exceed five-ten per cent of GDP," Turner predicted in a recent interview "and perhaps considerably less as indeed was the case in the Swedish banking crisis of the 1990s.” He summed up.

Recent research is pointing to a situation that increasingly adds weight to the theory that the UK’s property rental sector is heading towards a similar model of the mainland European countries of increasingly longer tenancy agreements.

According to one of the UKs largest letting agencies, during the last year and a half, a fairly dramatic increase in demand for rented accommodation has been observed, with potential tenants being especially interested in properties with long term tenure periods.

Reasons given for this new phenomena in property rental appears to be largely causes by increasing difficulties of young families to raise the new and higher deposit levels required to be granted a mortgage, while around a third confessed that they were unsure that the conditions were ripe to put their toe in the still turbulent waters of the UK property market. With almost 40 percent of potential first-time home buyers opting to remain tenants in the meantime, because of the current tough mortgage-lending criteria and 14% of those questioned said they preferred life as a tenant to that of a homeowner.

Home ownership in the UK has fallen by three percent since 2003 with the trend likely to continue. Several of the UK’s leading property management companies now believe that the UK Government now needs to ensure that renting a home offers the stability levels that are currently only afforded to home owners.

British Airways, once again under strike threat have dug in by saying that more than one thousand of the staff have volunteered to work as cabin crew if indeed the threatened strike goes ahead.

As a further back up, BA announced that they also intended to hire no less than 23 fully crewed planes from a leading European owned charter company. The company’s role will be to help run flights from Heathrow Airport should the strike threats eventually materialise.

The Society of Motor Manufacturers and Traders (SMMT) recently announced that new car sales in the UK increased by 26.4% in February compared with the same month in 2009, with the main push in demand coming because of the Government’s scrappage scheme.

Launched in May of last year in an effort to boost the ailing car industry, the £400 million initiative, which allowed owners of cars at least 10 years old would be offered a £2,000 discount off the price of a new vehicle, with half of the grant being provided by the UK Government and the other £1,000 coming from the lucky carmaker. Figures from the SMMT show that almost 20 percent of new car sales in February came a result of the scheme, which is due to be wound up by the end of March.

On the stock market, Barclays Plc’s Asian partner, the China Development Bank announced that they will be reviewing their “ties” with the bank, U.K.’s second-biggest. The announcement caused shares in Barclays to rise one percent, to 333.1 pence.

The U.K.’s third-largest supermarket owner J Sainsbury Plc has announced plans to expand their activities into non-food products. They will be marketing electronics, entertainment and sports equipment among others through their Web site. Despite the excitement, Sainsbury shares 0.2 percent, to close on 335.4 pence.

Michael Page International Plc, the U.K.’s second- largest recruitment company announced a drop in full-year pretax profit of no less than 85 percent to £21.1 million pounds. Despite the reversal, their shares climbed 6 1.7 percent, to close on 395 pence.

The benchmark FTSE 100 Index fell 0.1 percent, to close on Thursday at 5,527.16.

On Wall Street, for the Dow Jones Industrial Average the only way was up, this time rising 47.38 points to close on 10,444.14. The NASDAQ Composite also held its own, rising 11 points to close on 2,292.31.

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Tags: Bank of England, Barclays, BOE, British airways, Dow Jones, Financial Service Institute, FTSE, general election, Heathrow Airport, Interest Rates, Lord Turner, Mervyn King, Michael Page International Plc, NASDAQ, quantitative easing, Sainsbury, SMMT, Society of Motor Manufacturers and Traders, UK government, Wall Street

One of the most painful aspects of the long drawn out economic slump is the effects that it has had on UK tax revenues. In June, Britain reported its highest budget deficit for a month for sixteen years, a massive 13 billion pounds, which was an increase of almost 50% from the same month in 2008.

To support these shortfalls, the Treasury has no option but to borrow, and this they have been doing, and in some style. In the first quarter of the UK financial year, which started in April, public sector borrowing reached £41.2 billion, the highest quarterly figure since records began in 1946.

China Investment Corp, (CIC) China’s sovereign wealth fund has acquired 1.1 per cent of the Diageo drinks group for £221million, which makes the fund the UK-based groups’ ninth-largest investor. Shares in Diageo were up 2.4 per cent to 906p after the announcement

CIC manages $200 billion of the country’s $2,132bn held in foreign exchange reserves also holds a 0.5 per cent stake in Tesco, Britain’s largest retailer.

Domino’s Pizza reported a double-digit increase in sales and profits for the six months to the end of June and raised its interim dividend by almost a third.

Continuing to be one of the few consumer-facing companies to defy the recession, the Domino’s Pizza chain, the UK’s largest pizza delivery service with more than 500 outlets, said it expected to beat full-year profit forecasts thanks to unrelenting demand for their takeaways. Domino’s Pizza U.K. & Ireland advanced 7.2 percent to 235.25 pence.

On the FTSE U.K. pub owner and brewer of Old Speckled Hen ale Greene King Plc, added 3.1 percent to close on 432.75 pence.

Food retailers were also among the rising stars shares in Wm Morrison Supermarkets up 8.2 per cent to 274pence after the announcement that they expected full-year profit to exceed current guidance as it reported strong volume growth over the first half.

Sainsbury also added 3.1 per cent to 326p, while Tesco climbed 1.4 per cent to 375p.

The retail sector showed mixed results with fashion retailer Next despite raising their profit forecast for the first half, retained a cautious outlook. On the news shares in Next fell by 1.6 per cent to 1618 pence.

Shares in the Home Retail Group, owners of Argos and Homebase, gained 1.3 per cent to close on 293 pence

London equity markets overcame an early bout of profit taking on Tuesday to extend their winning run to seven sessions.

The benchmark FTSE 100 was up 38 points to 4,481.17, while the FTSE 250 gained 75.95 points to 7,742.58.

The pound lost ground on Tuesday as concerns grew over the health of the UK government’s finances.

• Pound/US dollar 1.6422
• Pound/Euro 1.1578
• Pound/Japanese Yen 153.8127
• Pound/Swiss Franc 1.7553

Testifying before the House Financial Committee in his twice-yearly report on monetary policy, chairman of the US Federal Reserve, Ben Bernanke announced that US interest rates are likely to remain "exceptionally low" for some time. He went on to explain that low interest rates and a stimulus plan had buoyed the economy.

US stocks lost some of its Monday’s impressive gains on Tuesday, after rising during the morning, but then falling back as Ben Bernanke, addressed Congress about the future of US Federal Reserve policy.

On Wall Street , the Dow Jones continued its steady rise, rising 45.05 points to 8893.2 while the NASDAQ rose 3.55 points to 1912.84.

Sharply falling tax revenues are also beginning to have their effects across the US. Of the 50 states45 reported budget shortfalls and overall tax collections dropped by 11.7 per cent, the largest fall on record.

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Tags: Argos, Bank, Banking, Ben Bernanke, Britain, British Economy, British Pound, China Investment Corp, Credit Crunch, Diageo, Domino's Pizza, Dow Jones, Economics, Economy, Financial News, FTSE, Global Credit Crisis, Greene King Plc, Homebase, House Financial Committee, Money, Money Management, Money Markets, Morrison Supermarkets, NASDAQ, Old Speckled Hen, Recession, Sainsbury, Tax, tax revenue, Tesco, Treasury, US Federal Reserve, Wall Street

As the Royal Bank of Scotland’ struggles to push itself out of the quagmire created by Sir Fred and his crew, unpleasant surprises continue to emerge. A recent statement by incumbent CEO Stephen Hester made at the recent British Property Federation conference. The bank’s losses on real estate loans could be higher than it has provisioned for.
Hester went on to add that the bank’s updated assessment is that it could take between three and five years for the excessive level of property lending to level out. Summing up on a more positive note, Mr. Hester said that he foresaw for the future that RBS would need to reduce its exposure to the sector significantly, but that it would “behave responsibly and play a long game”, helped by the fact that most borrowers were continuing to service the interest on their debts.

Meanwhile UK chancellor Alistair Darling issued a warning to the British Bankers’ Association that further regulation and a crackdown on sloppy boardroom practices are on their way, including new regulations on higher liquidity and capital standards at banks. His announcement comes ahead of the release of a Treasury white paper next week on financial regulation, and the forthcoming EU summit in Brussels on plans for regional regulation of the banks.

That perennial bearer of bad news, the Office for National Statistics announced that UK unemployment has passed the two and a quarter million mark, in the three months to April 2009, making for the highest UK unemployment levels since November 1996. However there was a minor crumb of comfort to be taken from the news that the number of people claiming unemployment benefit rose by only 39,000, less than the 60,000 forecast by analysts.

Bus and rail operator National Express have announced the successful renegotiation of terms against their outstanding £1.2 billion, allaying fears that the company were liable to breach payment conditions set on the existing loan.

National Express have been fighting an uphill battle coping with servicing such a massive debt burden, whilst struggling with a major slump in passenger revenues, especially on its East Coast train franchise. At the same time, payments to the Department for Transport to service the franchise have been on constant increase.

And if things are bad on the ground, then they seem to be a lot worse in the air. If you need confirmation ask Willie Walsh, British Airways chief executive, who is facing fresh conflict with the unions on his proposal that BA staff should follow his personal example and work without pay for a month.

Walsh sent a personal note to each of the company’s 40,000 employees, asking them to volunteer for up to four weeks of unpaid work or unpaid holiday leave. Either option means no salary.

Needless to say it looks like Walsh faces a tough task convincing staff to accept his proposal, being that there is already no love lost between the company and the unions. Both Willie Walsh and BA’s chief financial officer Keith Williams set a precedent by announcing that they will be waiving their salaries for July. However a spokesman for Unite, BA’s biggest union, remained unmoved and unimpressed by observing that: “Willie Walsh can afford to work a month for free. Our members can’t

On the stock market, Sainsbury’s shares dropped 5.65 per cent to 313 pence after a surprise announcement that they plan to raise £445 million of fresh capital through a stock issue estimated to be worth £255 million as well as £190 million of convertible bonds offer. The capital is earmarked to fund the company’s growth; a spokesman for Sainsbury’s pointed out.

On the announcement that they had acquired a majority stake in an Indonesian clove cigarette maker shares in British American Tobacco (BAT) rose 0.2 per cent to 1660 pence. The acquisition that will cost BAT around £300 million will elevate the company to be the world’s fifth-biggest tobacco company, increasing their global market share from 2 per cent to 9 per cent.

The recent publication of the Digital Britain white paper has already worked wonders for the BT Group as hopes that government plans to extend broadband internet access would greatly benefit the fixed-line operator. After an advance of 8 per cent on Tuesday, shares in BT in rose a further 3 per cent to 106 pence.

Yesterday was not such a great day for FTSE. The 100 continued on its course of fluctuation this week falling 50.11 points to finish on 4,278.46. The FTSE 250 continued its rapid downward descent this time losing 174.45 points to close on 7,309.05.

Sterling rose for the second day again ever so slightly against the dollar, while losing considerable ground against the other major currencies

Pound/US dollar 1.6427
Pound/Euro 1.1766
Pound/Japanese Yen 157.0514
Pound/Swiss Franc 1.7711

The US government has announced a major reform of banking regulation to prevent future financial crises. The overhaul will require big banks to set more money aside against future losses to curb excessive risk taking. Consumers will enjoy the protection through a new government agency formed to protect their interests as well as regulating credit on mortgages and credit cards.

The US equities market moved into fluctuation mode on Wednesday as the government released details of their proposed regulations.
The Dow Jones rose 42.77 points to close on 8547.44, while the NASDAQ climbed back over the 1800 barrier, up 23.99 points to 1820.17.

US consumer prices rose less than had been expected in May, as the recession continued to keep inflation down.

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Tags: Alistair Darling, Banking, British American Tobacco, British Economy, Economy, EU summit, Financial News, National Express, Royal Bank of Scotland, Sainsbury, Stephen Hester, UK Banks, UK Credit Cards