Consumer confidence and in particular the sharp decline in retail spending have

Consumer confidence and in particular the sharp decline in retail spending have emerged as key factors in the Bank of England’s deliberations over interest rates. The Bank decided on Thursday to hold rates at 4.75 per cent, and yesterday it insisted there were no plans for an emergency meeting of the Monetary Policy Committee to review the position.Economists at the US investment bank Merrill Lynch said they thought a rate cut was likely when the MPC meets in August, rather than September.The bounce-back in London stocks was repeated elsewhere in Europe with France’s CAC index of leading shares gaining 1.9 per cent and Frankfurt’s DAX index closing 1.5 per cent higher, recouping most of Thursday’s losses. The London stock market bounced back yesterday from Thursday’s terrorists atrocities, regaining all the ground it had lost in the aftermath of the Tube and bus bombings in the capital. In what one dealer described as a display of “bulldog spirit”, the FTSE 100 index of leading shares climbed 73.9 points, or 1.4 per cent, to end at 5232.2, erasing the losses suffered the previous day when the market fell 71.3 points. It was not clear what form of compensation the consortium might have to pay Baugur for its contribution to the bid.. Both men have voiced their support for Jon Asgeir during the past week.The family’s lawyers are preparing to reveal the full details of the 40 charges, which carry a maximum six-year prison term in Iceland, early next week. It would have been easier for Barclays Capital, Apax and Mr Tchenguiz to stick with them than for a new partner to come in,” a source said.If the Johannessons are convicted – Jon Asgeir’s father and sister have also been indicted – then their close relationship with the likes of Sir Tom Hunter, the Scottish businessman, and Kevin Stanford, the co-founder of Karen Millen, could come under close scrutiny.

Two years ago, it was on the verge of bidding for Arcadia alongside Philip Green when the news broke of a police raid on its Reykjavik headquarters.Bankers warned last night that the fraud charges against Mr Johannesson had put Baugur’s reputation as a deal maker under threat. “In the short- to medium-term it will be very difficult for them to do deals. Robert Tchenguiz, the property tycoon, is the third member.It is the second time one of Baugur’s deals will have been scuppered by allegations of financial misconduct by Mr Johannesson. Baugur, the Icelandic investor at the centre of the country’s biggest business scandal, looked set to withdraw last night from the consortium bidding £1.1bn for Somerfield. The company, which controls several prominent UK retailers, has spent the week resisting pressure to retreat but finally prepared to succumb yesterday.

A source close to the group said: “A resolution is not a million miles away.”
Although Baugur is not implicated in the charges levied by Iceland’s police against its chief executive, Jon Asgeir Johannesson, and five associates last week, it has accepted its fate is too closely entwined with that of its founders to proceed. Barclays Capital is understood to have led the calls within the consortium to get Baugur ejected with Apax Partners initially fighting Baugur’s cause.But as details emerged of the severity of the charges, which are thought to include embezzlement and tax evasion, the consortium felt it was left with little choice but to push for Baugur’s expulsion. Greene King recently trumped W&D to take over the East Anglian brewer, Ridley. W&D recently bought the Lakeland brewer and pubs group, Jennings Brothers, as well as Burtonwood.While Spirit is an obvious target for W&D, it is also likely to be interested in smaller, regional pubs groups, such as the Scottish group Belhaven, toboost its northern presence.Shares in W&D closed up 1.5 per cent to 1,157p yesterday, as analysts expected the company to use some of its new financial resources on acquisitions.Nigel Parson, an analyst at Williams de Bro?said: “Even if they keep £100m as a cushion, that leaves them with a chunky sum to pursue deals.”. Mitchells & Butler, the operator of the O’Neills and All Bar One chains, is also on the prowl for Spirit’s assets.Pubs operators have faced difficult trading conditions, particularly on the high street, and are looking to consolidate to boost market share and buying power.

The brewer announced a refinancing of its debt yesterday to bring it on to a lower interest rate, but it also secured a £250m additional bank facility that it will use for “general corporate purposes”. Paul Inglett, the finance director, said: “The proposed refinancing of our existing debt will reduce interest costs and is consistent with our strategy of retaining the high-quality freehold asset base of the business, while providing greater flexibility for further development.”
W&D wants to expand beyond its 2,000 pubs and is understood to be keen on buying some of Spirit Group’s estate. The privately owned Spirit, which owns about 2,000 bars, is the subject of bidding speculation and an auction is poised to begin for its prized assets.Punch Taverns, which runs about 8,000 pubs, has made an approach to Spirit about buying part of its £3bn estate, and last week the company led by Giles Thorley completed a refinancing of its debt that gave it additional financial firepower for acquisitions. Wolverhampton & Dudley, the brewer and pubs operator, has become the latest pubs company to begin building up a war chest for acquisitions as consolidation fever takes hold of the sector. But Mark Malloch-Brown, the chief of staff to United Nations secretary general Kofi Annan, said: “There will be a lot of smokescreen and buckets of G8 paint thrown over old aid.”Jo Leadbetter, head of advocacy at Oxfam, said; “If the $50bn increase had kicked in immediately, it could have lifted 300 million out of poverty in the next five years.”War on Want said the G8 had given less than a tenth of its demands on debt cancellation and not even a fifth of what it called for on aid.It said just $15bn of the $50bn was new money.

“This is far too little, far too late,” said John Hilary, its director of campaigns.The main setback for the UK was its failure to get the US to endorse its plan for a financial device known as the international financial facility – under which governments would borrow money from the financial markets and deliver it straight to the frontline.Britain also failed in its drive to get the G8 to pledge to eliminate its subsidies for exported food by a specific date, instead calling on negotiators to set a date at a meeting of the World Trade Organisation in December.* Mr Blair said the G8 had agreed to aid amounting to $3bn over the next few years to help build peace in Israel and Palestine.. that has been led with a great deal of dignity and an enormous compassion and decency.”The Nigerian President Olusegun Obasanjo, called the G8 summit’s achievements a “great success”. “It is the definitive expression of our collective will to act in the face of death and disease and conflict.”We do not, simply by this communiqu?make poverty history. But we do show it can be done and we do signify the political will to do it.”He paid tribute to the campaign led most publicly by rock stars Bono and Sir Bob Geldof “This was a quite remarkable campaign … It is not the end of poverty in Africa but it is the hope it can be ended.”He acknowledged many of the campaign groups and the millions who participated in the Live8 events would be disappointed. “It isn’t all everyone wanted but it is progress, real and achievable progress,” he said. ActionAid’s policy head Charles Abugre said: “This will not make poverty history.”In its communiqu?the G8 sent a strong message to the rest of the world to strike a deal to make trade fairer for poor countries, announced universal treatment for Aids victims and confirmed plans to cancel billions of pounds of debts.The Prime Minister said of the aid package: “It is a beginning, not an end.”We came here in solidarity with the continent of Africa and we have come here to announce a plan for action in partnership with Africa.