Week in pictures

A chastened Royal Bank of Scotland posted a loss of £691m - its first in four decades - after writing off almost £6bn because of the credit crunch Photograph: Newscast

In Britain, HSBC axed 1,100 jobs worldwide, including 500 in the UK. Bradford & Bingley announced it is cutting 370 jobs, with the closure of its mortgage processing centre in Borehamwood Photograph: Gabriel Szabo/Newscast

The government has been forced to provide up to £3bn of extra capital for state-owned Northern Rock as the housing market worsens Photograph: Christopher Thomond /Guardian

Barclays posted a sharp drop in profits, wrote off another billion pounds and apologised for its share price performance Photograph: Frank Baron/Guardian

The Bank of England's monetary policy committee cut interest rates by half a percentage point to 1.5% – their lowest level since the central bank was founded more than 300 years ago Photograph: Andrew Winning/Reuters

The price of oil slid to $118 a barrel as investors predicted that demand from the US and Europe was waning, at a time when some oil-producing countries have increased supply Photograph: Achim Scheidemann/EPA

Inflation on the high street soared in July to reach its highest in more than 18 months, with food prices nearly 10% more expensive than a year ago Photograph: Graham Turner /Guardian

Sales at Britain's biggest carpet retailer, Carpetright, slumped as a result of worsening economic conditions Photograph: David Parry/Newscast

Lonmin, the London-based mining company created out of Lonrho in 1998, is facing a $10bn (£5bn) hostile takeover bid from its larger rival Xstrata Photograph: Alamy

Drax has seen profits plunge by almost half as it pays the price for running the country's biggest single carbon-polluting power station Photograph: John Giles/PA

Air France-KLM and Spain's Iberia have reported a slump in profits as a result of high fuel costs. Meanwhile, the global airline industry will fly 60m fewer seats in the run-up to Christmas - equivalent to a 7% cut in flights Photograph: Lewis Whyld/PA