THE recent recovery in banking shares will be put to the test this week, when Royal Bank of Scotland (RBS) and Barclays issue trading updates.

RBS is now 70 per cent owned by the taxpayer and posted a UK record £24.1bn loss last year, after mounting bad debts and huge writedowns on its disastrous purchase of ABN Amro in 2007.

But Barclays – which posted a £6.1bn profit last year – has avoided state support and dropped several hints of a strong start to the year in recent brief updates to the market.

RBS announced 9,000 job cuts in April as the firm looks to make £2.5bn in swingeing savings over the next three years to put the bank back on its feet.

Fashion chain Next’s update on recent trading tomorrow will allow markets their latest look at the fragile conditions on the high street.

The retailer is likely to have seen a more positive April with good weather for most of the month and a later Easter boosting takings.

Knorr-to-Dove soap consumer firm Unilever delivers first-quarter figures on Thursday, with markets hoping for an improvement on the firm’s gloomy February update.

Unilever revealed the impact of the global downturn as it reported falling sales volumes and said the outlook ahead was uncertain.

Unilever made an unfavourable contrast with Vanish-to-Cillit Bang rival Reckitt Benckiser, which last week reported a “strong” quarter and stood by its own revenues and earnings targets.

Guinness-toSmirnoff drinks firm Diageo’s trading update on Thursday will also come under close scrutiny after a tough three months for the industry.

In February, the company downgraded its expected profit growth this year to between four per cent to six per cent, compared with its earlier prediction of seven per cent to nine per cent, as the slowdown begins to grip.

Tomorrow’s interim results from accountancy software firm Sage will show the impact of a turbulent six months on the business.

The Newcastle-based group, which serves nearly six million businesses across the world, warned of “particularly challenging market conditions” three months ago.

Half-year results from easyJet tomorrow will show how the airline is coping amid falling spending in the recession.

Last year, easyJet said increased fuel costs had caused annual profits to fall 45 per cent in the 12 months to September 30, despite a 31.5 per cent rise in revenues.