than those reliant on the consumer they face pressure to cut prices which is likely to hamper

than those reliant on the consumer, they face pressure to cut prices which is likely to hamper the growth in profits,” said Sudhir Junankar, the CBI associate economics director.The car industry also has reason for optimism. “But although business and professional firms are more upbeat about expansion … Economist Richard Iley of ABN Amro said: “Given the growing body of evidence that the domestic economy is on the mend, the MPC will be loath to risk further stimulation.”Dharshini David agreed that rates would be kept on hold: “These data indicate that manufacturing will boost growth in the second quarter, pointing to a stronger overall GDP figure.”Estimates from the National Institute of Economic and Social Research showed GDP rose 0.4 per cent in the three months to May and was projected to show 4 per cent growth in the second quarter of the year.Meanwhile, confidence is still rising among Britain’s service companies with hopes of a strong rise in business this summer, according to new research.The Confederation of British Industry’s quarterly survey showed optimism continuing to grow but at a slower rate than in March. People are learning to live with the level of the pound.”However, companies are still reticent about committing themselves to essential investment and we would urge the Bank of England to hold rates at or around their current level for as long as possible.”The Bank’s Monetary Policy Committee last month cut rates by 25 basis points to 5 per cent and is expected to keep them unchanged after it meets today and tomorrow. The wider measure of industrial production, which includes oil, gas and utilities, rose 0.1 per cent.A separate survey from the Engineers Employers Federation said output and orders fell in the latest three-month period but at a slower rate.David Giachardi, EEF director of policy, said: “We may have passed the worst point of the current economic cycle. The rise took the three-monthly growth trend in manufacturing to 0.5 per cent, its highest level for 11 months, the Office of National Statistics said.The ONS said the trend performance for manufacturing was running at around minus 0.5 per cent, an improvement on the minus 1.5 per cent in April.

“I know business is still finding it tough, especially manufacturing industry,” he told a conference of venture capitalists. “I understand these concerns though I do believe continuous devaluation is not a permanent solution to our economic problems.”
Mr Blair was speaking as official data showed manufacturing output rose 0.2 per cent in May against 0.1 per cent in April and a forecast of 0.1 per cent. THE PRIME MINISTER told manufacturers to learn to live with the high pound yesterday as new figures showed the beleaguered sector had turned the corner to recovery. Tony Blair told businesses that devaluation was “not a solution”, despite acknowledging the pain they suffered from the strength of sterling in terms of exports. Air Liquide is the world leader in the industrial gases market with a 17 per cent share, while BOC and Praxair each have 15 per cent and Air Products around 8 per cent.Analysts believe that the best combination and the one least likely to hit regulatory barriers would be a BOC-Air Liquide merger.. “If at the end of that process the deal was not allowed to go ahead, the BOC management would have presided over a very significant diminution in the value of their company,” the source added.BOC initially held merger talks with Praxair of the US but after these broke down it entered discussions separately with Air Liquide and Air Products. Analysts believe that the two companies will have to bid more than 1500p to gain the backing of the BOC board, led by chief executive Danny Rosenkranz.Air Liquide and Air Products may also have to make their bid unconditional on regulatory clearance.Sources close to BOC said that a conditional bid would leave the company in limbo, unable to sign new customers or to continue its own restructuring programme with no guarantee that the merger would be ultimately gain regulatory clearance.

Their initial approach was pitched at 1420p a share, valuing BOC at pounds 6.9bn. The combined business would have a market share of more than 50 per cent in the United States, making wholesale disposals inevitable if a merger was to gain anti-trust immunity.BOC declined to say what price Air Liquide and Air Products had indicated they were prepared to pay. BOC cautioned that the proposal was still not satisfactory “in a number of important respects”. But instead of breaking off talks as it did last month, BOC said its board was exploring whether these issues could be addressed.
The statement prompted an 80p rise in BOC shares to 1366p as dealers sensed that a deal to consolidate the industrial gases market was closer to hand. BOC shares have risen by 138p since Monday, making for a two day gain of 11 per cent.The sticking point with any three-way deal involving BOC, Air Liquide and Air Products continues to be regulatory approval. SHARES IN BOC rose by 6 per cent yesterday after the industrial gases group disclosed that it had received a second joint takeover approach from two of its rivals, Air Liquide of France and Air Products of the United States.