Need to know

The dollar dropped to another record low against the euro as markets continued to fret over the impact of the shakeout in the US sub-prime mortgage market. By early afternoon in New York, the euro was up 0.3 per cent at $1.3779, having hit an all-time high of $1.3799. The pound eased back to $2.0289, from $2.0343 at the open.

Oil prices rose again to 11-month highs above $77 a barrel. In London, Brent crude rose $1.26 a barrel to $76.70, its highest since August 10 last year, while US light crude added 64 cents to $73.20.

The Bank of Japan left interest rates in the world’s second-largest economy on hold after a vote of 8-1 by its monetary policy committee. However, Toshihiko Fukui, the BoJ Governor, did little to dispel market expectations that Japanese rates would rise in August in comments that struck a hawkish tone.

The British Chambers of Commerce sounded a warning over further rises in interest rates, despite buoyant findings in its latest survey of business conditions. The quarterly survey found domestic sales and orders in manufacturing at their strongest for 12 years, with export sales and orders at their best since last autumn. In services, domestic sales were at a three-year high, but orders dipped and export business also faltered.

The Taxpayers’ Alliance has reported evidence of cost overruns worth £23 billion against initial plans for some 305 public sector capital procurement projects. The average project saw costs exceed plans by a third, and 57 per cent of all projects saw costs exceed the intended level. Only 14 per cent came in under budget.

Banking & finance
Down 0.78%

Norwich Union Almost 100,000 policyholders with the huge insurer have been misinformed about the size of the retirement income they can expect, the company has acknowledged.

Admiral, the car insurer, abandoned the £160 million sale of a minority stake in Confused.com after potential private equity buyers demanded too much control over boardroom policy at the website.

Mortgage banks are expected to foreclose on 1.8 million American home loans this year, as stretched sub-prime borrowers contend with rising interest rates.

HBOS will spend £160 million expanding its Australian arm, BankWest, in the biggest branch expansion programme that Australia has experienced.

Nationwide said that it would reintroduce a 25-year fixed-rate mortgage only a day after Gordon Brown expressed the need for such products to encourage home ownership. The lender said that the product would feature a rate of 6.39 per cent.

Bear Stearns has opened a London Metal Exchange trading desk in New York to try to meet higher demand from customers, especially hedge funds.

The NatWest Three, in a fresh attempt to win their freedom, have petitioned the US Government to release crucial new evidence that they assert will clear them of Enron-related fraud charges.

Construction & property
Down 0.36%

Marylebone Warwick Balfour will put a £700 million “For sale” sign over the Hotel du Vin and Malmaison hotel chains after opting to pursue an outright sale of its hotel business.

Land Securities said that its property partnership business, Land Securities Trillium, had purchased Amec’s project investments business for £163.5 million. The deal is expected to be completed by October 31.

Consumer goods
Up 0.81%

Scottish & Newcastle, Britain’s largest brewer, is planning to take a bigger slice of the over-ice cider market by introducing Upcider Pear, a pear-based drink produced by Hartwall, its Finnish subsidiary.

Marston’s, the Midlands brewer and pub operator, has acquired Ringwood Brewery in Hampshire, the purveyor of Old Thumper and Ringwood Best Bitter, together with seven pubs, for £19.2 million.

Cadbury Schweppes said that it had acquired the Southeast-Atlantic Beverage Corp (Seabev), the second-largest independent bottler in the US, from private shareholders for an undisclosed sum.

Nestl? will raise prices, cull unprofitable products and accelerate production rationalisation to prepare for a lasting rise in the cost of commodities and energy, Jos? Lopez said in his first interview as head of operations.

Engineering
Down 0.69%

Volkswagen increased vehicle sales in the first half by 7.8 per cent to 3.09 million units, after strong growth in Asia and South America, the company said.

Airbus is considering how to raise its aircraft assembly capacity to meet strong demand, as a recent spate of orders has left the EADS unit with a backlog of about 3,000 aircraft to build, a spokesman said.

Health
Up 0.2%

Test results ASA404, an experimental cancer drug being developed by Antisoma, of the UK, and Novartis, of Switzerland, has failed in a mid-stage clinical trial for ovarian cancer, cutting about a fifth off the market value of Antisoma.

Industrials
Down 0.29%

Magnitogorsk Iron and Steel produced 10.6 per cent more finished products in the first half of 2007 than in the same period a year ago, the company said. Russia’s third-largest steelmaker said that it had turned out 5.95 million tonnes of finished products in the first half of this year.

Leisure
Up 0.38%

Papa John’s, the American pizza delivery operator that has 87 British outlets, has signed a deal with a former Burger King franchise holder to open at least ten stores along the M4 corridor over the next four years.

Capital Pub Company, the recently floated London pub operator, said that it planned to open four or five outlets in the current financial year. It seeks to double in size from 23 pubs in the next four to five years.

Thomas Cook, which recently merged with MyTravel, confirmed plans to close 67 Thomas Cook shops and 84 Going Places stores with the loss of about 730 jobs. It said that it planned to retain MyTravel’s Going Places brand on 70 of the remaining 806 shops.

Marriott International, the US hotel operator, reported a better than expected 11 per cent jump in second-quarter profits, although its shares fell as it lowered again its rooms revenue forecast for its hotels in North America.

InterContinental Hotels Group announced the disposal of the 357-room InterContinental Montreal to Pandox, the Swedish investment firm, for about £23 million via a sale and manage-back deal.

Media
Up 0.36%

Fimalac, the French group that owns the Fitch credit rating agency, offered ¤Les Echos, hoping to snatch the business daily from Bernard Arnault, the head of LVMH, the luxury goods group.

Natural resources
Up 0.98%

BP’s chief executive, Tony Hayward, is planning sweeping cuts as he seeks to strip out layers of bureaucracy and complexity from the oil company and to alter its culture.

Rio Tinto emphasised its eagerness to buy Alcan with a $38.1 billion (£18.8 billion) offer for the Canadian aluminium producer.

Retailing
Up 1.64%

Tesco, the supermarket group, is launching its biggest price-led advertising campaign for a decade amid growing concerns of a slowdown on the high street.

Wm Morrison said that it had appointed Sir Ian Gibson as non-executive deputy chairman of the group, to assume the chairmanship next year. Sir Ian, who will take up his post on September 1, will become chairman of the supermarket chain when Sir Ken Morrison stands down as group chairman.

Sports Direct has purchased a 60 per cent stake in Field & Trek, the outdoor clothing and equipment retailer.

Wal-Mart Stores reported a higher than expected 2.4 per cent rise in sales at its US stores that had been open for at least a year in June.

Support services
Down 0.45%

Experian the credit-checking and information group, reported an 8 per cent rise in global sales, in line with expectations, during the first three months of the year to June 30, boosted by a solid performance in credit services.

Technology
Down 1.07%

Yahoo! said that it had closed its $650 million (£320 million) acquisition of the 80 per cent of Right Media that it did not already own.

3M, the industrial conglomerate, said that it would buy Rochford Thompson Equipment, a private UK company that makes optical character recognition passport readers, for an undisclosed sum.

Telecoms
Down 0.58%

Pipex, Britain’s fifth-largest internet service provider, is close to a £210 million deal to sell its broadband base to Tiscali.

Motorola’s embattled chairman and chief executive, Ed Zander, is facing renewed pressure to quit after the company astonished Wall Street by acknowledging that its mobile phone division would fail to make a profit over its financial year.

Sony Ericsson reported a 53.8 per cent jump in net profit for the second quarter of 2007, as the Japanese-Swedish mobile telephone manufacturer experienced double-digit sales growth.

Transport
Down 1.2%

Fare rises A railway passenger watchdog has accused British operators and the Government of imposing “unfair and opportunistic” fare increases on passengers. The rising cost of turn-up-and-go tickets and overcrowding needed to be addressed, Passenger Focus said in its annual report.

FirstGroup, the bus and rail company, said that first-quarter trading had started well and was in line with expectations. Unaudited group operating profits for the three months to June 30 were up 9.3 per cent on the same period last year, it said.

Utilities
Down 0.9%

Bob Geldof, the Irish rocker and activist, has thrown his weight behind a new project aimed at producing electricity from plant seeds in Africa.

Up/Down = sector index percentage change on day