Barclays this morning confirmed that, as long expected, it was considering raising capital by offering sovereign wealth funds a chunk of the bank at a premium. If it goes ahead, Britain's third-biggest is likely to be able to circumvent pre-emption rules by offering existing investors the chance to buy in at the same price.

That Barclays would eventually have to raise cash was a foregone conclusion - it has one of the lowest capital ratios in Europe, at a time when all banks are under regulatory pressure to bolster their balance sheets. Analysts calculate that a £4 billion capital raising would increase the bank's core equity tier 1 ratio by about a percentage point to close to 6 per cent, which was the ratio targeted by Royal Bank of Scotland before its £12 billion rights issue this month.

The Barclays statement was accompanied by a short trading update that was even more positive than that given in April. Barclays' shares jumped nearly 6 per cent in response.

If the bank manages to raise the £4 billion without the trauma of a rights issue, and it gets through the first half without a profits warning or huge writedowns (the market is sceptical that Barclays has been as conservative as its competitors when it comes to marking down some assets), then last week's 306.5p low should prove to have been the bottom.

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