Tuesday lunchtime business bulletin

May 6 2008 By Andrew Mernin

Airlines were suffering on news of record oil prices today as further rises in the cost of crude sent shares tumbling.

The falls dragged the FTSE 100 Index into negative territory, down 21.2 points at 6194.3 after what had been a positive opening for the shortened trading week.

The Footsie, which closed on Friday at its highest level since January, saw the largest falls from stocks including British Airways, down nearly 4%, or 9p, to 239.75p after oil prices of more than 120 US dollars a barrel.

Its FTSE 250 counterpart easyJet sunk lower on the fuel cost woes, down 15.5p at 308.75p, as it was also hit by a downbeat note from Deutsche Bank which suggested all airlines will have to ``prune back growth plans, cut costs or materially raise prices".

Swiss bank UBS today said it was axing around 5,500 jobs as it revealed first quarter losses of £5.5bn.

The group said it will cut 2,600 jobs in its investment banking arm by the end of the year, with the remaining roles to be trimmed across the business by mid-2009.

It is unclear how many jobs will go in the UK, where UBS employs around 9,000 staff.

Just under a third - some 6,000 - of the group’s investment banking team is employed in the UK, but it is understood that the bulk of the job losses will affect UBS’s US workforce.

Banking group Lloyds TSB today revealed a further £387m hit from the credit crunch, but signalled there would be no need for a cash call to investors.

The high street bank said its funding position was strong and it was "firmly on track" to deliver a good first half performance.

Each division saw "double digit" growth in profits before tax in the first quarter, excluding the credit crisis impact, according to Lloyds.

The pound at noon US$1.9707 compared to US$1.9687 at the previous close while the euro at noon was £0.7876  compared to £0.7871 at the previous close.