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BA is expected to announce losses of 600m this week

In one of his first acts as Transport Secretary, Phil Hammond has called the meeting for tomorrow morning, the day before 20 days of industrial action are due to start. BA officials have also agreed to attend ACAS as momentum builds behind a possible last-minute deal.

In an interview with The Sunday Telegraph, Willie Walsh, BA’s CEO, said that he would consider recruiting new cabin crew once the latest strike was over to ensure that if there were another dispute the airline would be able to provide a “100pc service”.

Mr Walsh said he expected 70pc of flights to operate during the strike over the next three weeks. BA is likely to announce record annual losses of up to £600m later in the week.

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The company expects to finally launch the $21bn UK record rights issue after a fortnight of talks with the City regulator, the Financial Services Authority (FSA), which blocked the fund-raising earlier this month amid concerns about the level of capital that the enlarged group would have.

An announcement from the insurance group is expected to come as early as tomorrow, if a deal with the FSA is struck this weekend. The watchdog is close to approving a new capital structure at the group, which was enhanced after the Prudential and AIA agreed to reduce the $25bn cash component of the deal by $2bn. Prudential will also need approval from the UK Listing Authority.

Senior figures close to the deal said that the FSA had agreed “in principle” and that the issue was now going through the final legal checks.

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Mr Trichet wants to enforce sanctions on countries that threaten stability

In what will come as a boost to the much-criticised hedge fund industry, Jean-Claude Trichet, the president of the European Central Bank (ECB), said the poor state of Europe’s public sector was to blame for the Continent’s troubles.

Mr Trichet also rejected as “nonsense” suggestions that European governments had forced the ECB to act last week in the face of the sovereign debt crisis.

The ECB head told Der Spiegel, the German magazine, that Europe could be facing its toughest situation for 65 years. “Without a doubt, since September 2008 we have been in the most difficult situation since the Second World War, perhaps since the First.”

Mr Trichet said the slump in the euro – which tumbled 1.5 cents against the dollar on Friday to $1.2358 – was the fault of European governments themselves.

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