It would have to pay the Pru $600m (£417m) if AG reneges on its earlier agreement."Until someone else changes [the agreement] it will result in a deal," Mr Bloomer said. "Because it is legally binding, for me to express anything else would be breaking our side of the agreement."Prudential also unveiled new-business results for the first quarter showing a 29 per cent increase in insurance and investment sales from the previous year's period, at £5bn. On an annual-equivalent basis, sales were £642m, also up 29 per cent.Tumbling US equity markets harmed Jackson National Life, the group's US business. Its new insurance premiums declined 20 per cent, to £1.2bn, and variable annuity sales fell 51 per cent to £239m.Meanwhile, egg said it would turn profitable during the fourth quarter and would report its first quarterly profit this time next year. First-quarter results showed net new customer numbers at 224,000, up 60 per cent from the previous quarter. Credit card customers increased 150 per cent from a year earlier to 981,000.

Pre-tax losses were £37.9m, against £38.3m in last year's quarter.Deposits declined by £394m, to £6.32bn, as the size of new deposits continued to decline and high-net-worth customers continued to leave the bank in search of better deals after egg cut savings rates. Since the end of the ISA season, deposits had increased, the bank said.Stacey Cartwright, the finance director, said the shifts in the customer base were in line with the company's plans to increase the number of cross-bought products. "We want long-term, stable customers," she said.Cross-bought products jumped 10 per cent from the previous quarter.. Calls for a swift cut in eurozone interest rates burst out into the open last night as one EU finance minister openly petitioned the president of the ECB, Wim Duisenberg, for a relaxation of monetary policy.

Calls for a swift cut in eurozone interest rates burst out into the open last night as one EU finance minister openly petitioned the president of the ECB, Wim Duisenberg, for a relaxation of monetary policy. Ministers from the 12 eurozone countries gathered in Malmo, Sweden, just two days after the US Federal Reserve cut its rates for the fourth time in four months, but the ECB is showing no signs of following suit next week.Austria's finance minister Karl-Heinz Grasser broke ranks before the meeting by arguing: "A monetary policy easing is important when inflation is under control and money supply is falling. A rate cut is long overdue."On Thursday, Didier Reynders, finance minister of Belgium, which chairs the Eurogroup, called for its views to be taken into account by the ECB and a "spirit of dialogue" between the two bodies. France is among the countries thought to be lobbying in private for a cut in rates.Last night Mr Reynders again raised the vexed issue of Mr Duisenberg's term of office and whether he intends to adhere to a "gentlemen's agreement" to stand down from his post next year in favour of a French candidate. "I think it's good to be clear about all issues, be it budgetary policy, monetary policy or the deadlines by when new appointments [for jobs] have to be made," he said.That provoked a sharp response from the German finance minister, Hans Eichel, and Luxembourg's Prime Minister, Jean-Claude Juncker, both of whom said that such talk should cease immediately.With the euro rising above 90 cents yesterday, some colleagues were anxious to steady the boat and Mr Eichel said it was "not for us to advise the ECB on interest rate policy". The ECB has kept its main rate unchanged at 4.75 per cent since last October.The ECB's formal mandate is focused on the maintenance of price stability. Most analysts expect the ECB's next meeting on Thursday to lead to a rate cut.

Claudia Henke, ECB analyst for the Dresdner Bank in Frankfurt, said: "There was already pressure for a cut before the Fed's decision, and I think the earliest a rate cut will come is June." Dresdner is still forecasting 3 per cent growth in Germany this year, with the bank convinced that the eurozone will avoid the worst effects of the US slowdown.Figures published yesterday by the EU's statistical agency showed adjusted industrial production increased by 0.4 per cent in the eurozone from January. The year-on-year figure slowed from January but remained respectable at 3.8 per cent.Sweden's finance minister, Bosse Ringholm, said: "It is a fact that the American economy will mean less and less to Europe because the EU is becoming stronger, and therefore European dependence will diminish."On Thursday, US Treasury Secretary Paul O'Neill said he was "mystified" by the public confidence of European leaders in Europe's growth outlook.. UK pension funds have bad their worst beginning-of-year performance since 1974, according to the latest influential CAPS survey of the industry. UK pension funds have bad their worst beginning-of-year performance since 1974, according to the latest influential CAPS survey of the industry. The median average performance of British pension fund managers fell 7.2 per cent in the first three months of the year, only narrowly beating the FTSE All-Share, which fell 8.4 per cent in the period. It was the fifth successive negative quarter.The winners were, unsurprisingly, funds that gave the technology and telecoms sectors a wide birth. The top three slots went to funds managed on behalf of J Rothschild Assurance by Global Asset Management, St James' Place and Schroders. GAM was the only fund to end the quarter in positive territory, obtaining a return of 6.1 per cent.GAM is headed by Andrew Green, a fund manager known for his "thematic" investment approach.

His winning theme in the first quarter was cash, a spokesman for J Rothschild said. St James' Place also took a defensive strategy, focusing on "value" stocks ­ companies that looked cheap relative to their earnings. The Schroders fund was one-half global, one-half an actively managed portfolio of 30 UK stocks.Funds managed by Phillips & Drew, which came under fire last year for pursuing a value strategy and eschewing hi-tech stocks, came in fourth and fifth, and on a 12-month view came first. Matthew Stemp, head of client portfolio management at UBS Asset Management, P&D's owner, said: "Sticking to our guns has paid off. We're not going to make any dramatic changes, but we are taking opportunities to buy some technology and telecoms stocks now."Value stocks handsomely outperformed growth stocks in the first quarter. High-yielding equities fell just 1.7 per cent in the period, while low-yielding stocks tumbled 16.4 per cent.