Business week in pictures

Labour, the unions, economists, and critics of high pay are lining up to argue that the government's Project Merlin – the truce with the banks over bonuses, taxation and lending – does not tackle the promises made by the coalition to crack down on bonuses and get banks lending again. One of the toughest critics of the deal was the Lib Dem peer Lord Oakeshott, who resigned as the party's Treasury spokesman after saying the agreement should never have been signed Photograph: Jerry Lampen/Reuters

Under the deal, Stephen Hester, chief executive of Royal Bank of Scotland, is to take a £2.04m bonus for last year, his first payout since being parachuted in to run the bailed-out bank in October 2008. Eric Daniels, his soon-to-leave counterpart at bailed-out Lloyds Banking Group, is to receive £1.45m Photograph: Oli Scarff/Getty Images

Homeowners and business organisations breathed a sigh of relief as the Bank of England kept interest rates unchanged at their record low. The Bank's monetary policy committee left its base rate at 0.5% for a 23rd consecutive month Photograph: Matt Cardy/Getty Images

A flurry of furniture and TV buying in the first few days of the year lifted retail sales in January, but the rise was quickly followed by a downturn in the second half of the month after shoppers took fright at the prospect of rising unemployment. UK retail sales values were up 2.3% on last January helped by discounting ahead of the VAT rise to 20% Photograph: Leon Neal/AFP/Getty Images

Hopes of an export-led recovery in Britain's fragile economy remain faint, according to official figures which showed that the trade deficit hit a record high of £9.2bn in December. Exporters delivered their best performance since 1977 over last year as a whole, with foreign sales of UK products expanding by 17%; but their efforts were swamped by a larger rise in imports, according to the Office for National Statistics
Photograph: Graham Turner/The Guardian

Drinkers in Greece, Ireland and Spain curbed the temptation to drown their economic sorrows at the end of last year, causing Guinness and Johnnie Walker drinks group Diageo to miss first-half profit forecasts because of disappointing demand Photograph: Jussi Nukari/Rex Features

Sir Frank Williams, the Formula One team boss, and his business partner Patrick Head are expected to share as much as €69m (£59m) by cashing in their shares in an upcoming flotation of their grand prix team on the Frankfurt stock exchange. A detailed prospectus for the public offering reveals that the Oxfordshire-based Williams motor racing team is to be valued at about €265m, with individual shares costing between €24 and €29 Photograph: Fernando Hernandez/AP

Thousands of British Airways cabin crew will be re-balloted over industrial action after the airline warned staff could face dismissal if they strike this month. The Unite union abandoned the threat of fresh walkouts after objections from BA over the legality of January's strike ballot, which saw more than 5,000 crew vote for action Photograph: Oli Scarff/Getty Images

Financial markets are braced for fresh action from China to curb inflationary pressure after Beijing announced the second increase in the cost of borrowing in six weeks. 'It is the first interest rate rise in the Year of the Rabbit, but it will not be the last,' said Xu Biao, an economist with China Merchants Bank in Shenzhen Photograph: Reuters

Thomas Cook announced that political unrest in Egypt and Tunisia would reduce its profits by about £20m in its financial second-quarter, covering the three months to the end of March Photograph: John Moore/Getty Images

The Qantas A380 engine blowout cost Rolls-Royce £56m in compensation payouts and emergency engineering work, the British industrial company has revealed, as it attempted to draw a line under an incident that threatened a BP-style corporate backlash. The £12bn group, whose products span fighter plane engines and nuclear technology, was at the centre of a massive aviation safety scare last year when an Airbus superjumbo carrying 466 passengers and crew was hit by an explosion in one of its four Rolls-Royce Trent 900 engines shortly after taking off from Singapore's Changi Airport Photograph: James D Morgan/Rex Features

Nokia chief executive Stephen Elop warned in a speech that the mobile firm is 'standing on a burning platform'. Elop is expected to make a significant announcement about what Nokia will do to stem the loss of market share, notably in the smartphone market, where despite being the biggest player it has been unable to compete with incomers, notably Google's Android and Apple's iOS Photograph: Lehtikuva OY/Rex Features

The mobile phone group created by the merger of Orange and T-Mobile's UK divisions will announce plans on Thursday to launch a new chain of Everything Everywhere stores on the high street Photograph: everythingeverywhere.com