Seven days in the Square Mile

Tesco chief Sir Terry Leahy delivered an upbeat assessment of the economy, claiming he is confident that Britain "is out of recession and will stay out". But there was a further slew of worrying data. The ONS reported that unemploy- ment rose by 43,000 to 2.5m in the three months to February, bringing the jobless total to its highest since 1994. Mean- while, rising transport costs - notably the price of petrol - pushed inflation much higher than predicted by analysts. The consumer price index (CPI) shot up to 3.4% in February. The Retail Price Index (which includes housing costs) also rose sharply from 3.7% to 4.4%.
The Financial Services Authority said it would launch a formal inquiry into the activities of Goldman Sachs, following the US Securities Commission's decision to pursue civil charges of fraud. The case is likely to spark a wave of further litigation centring on the mis-selling of mortgage derivatives: the Dutch bank, Rabobank, accused Merrill Lynch of a similar misdemeanour. The IMF released proposals for two new international levies on banks, amid calls for a ban on the trading of "synthetic CDOs" at the heart of the Goldman case.
The International Air Transport Association reported that global airlines have lost about $1.7bn as result of the Icelandic volcanic eruption. At its height, the crisis hit almost a third of global flights. The OFT fined two tobacco groups and nine retailers a record £225m for cigarette price-fixing. Apple shares hit an all-time high after the company reported a 90% increase in Q2 profits.