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The Stock Exchange halved the time for settling trades to five days in an attempt to match other big financial centres. The Tory leadership crisis sent the FT-SE 100 index of leading shares down 70 points to 3,309, its biggest one day fall for 16 months. Sterling reached its all-time low on the trade-weighted index of currencies. Britain's current account deficit in the first quarter was pounds 397m, worse than expected. Germany's Dresdner Bank offered 725p a share for the merchant bank Kleinwort Benson, valuing it at pounds 1bn.

The Labour Party unveiled its economic blueprint, pledging sound public finances and a stable monetary policy, but refusing to put a figure on plans to bring back a minimum wage. Car maker Daimler-Benz announced that the mark's strength would drive it into losses. The Chancellor hinted at tax cuts in the next Budget.

Imro's chief executive said claimed he was pressurised by his chairman into toning down criticism of the Securities and Investments Board in evidence to MPs. Allied Domecq sold Tetley Tea to a US-led management buy-in team. Asda claimed it had replaced Safeway as Britain's third largest supermarket group, after announcing profits of pounds 265m. Richard Branson became Britain's largest cinema owner, buying MGM for pounds 205m.