Tuesday evening business bulletin

Jan 29 2008 By Andrew Mernin

London’s FTSE 100 Index posted strong gains today amid hopes for a further cut in US interest rates this week.

The Footsie was up 52.6 points at 5841.5 by lunchtime, although this was down on the 90-point rise seen earlier in the session.

Traders in London were on the front foot after New York closed up more than 1% as investors crossed their fingers for another large rate cut to the US economy. Markets in Asia responded with strong gains, with Europe following suit.

Broadcasting giant BSkyB said today it will take a £343m hit after being told to ditch more than half its controversial 17.9% stake in ITV.

Business Secretary John Hutton has ordered Sky to sell-down the shareholding to below 7.5% to address competition concerns.

BSkyB now faces steep losses on the ITV stake after seeing the group’s share price plummet amid concerns over advertising revenues.

The holding is now worth less than two-thirds of the £940m originally paid in November 2006.

Sky confirmed it will have to make the £343m write-down in its half-year results, due out next week.

An investment group run by retail entrepreneur Mickey Jagtiani snapped up a bigger slice of department store chain Debenhams today.

Shares in Debenhams rose 6% on takeover speculation after it emerged Dubai-based Milestone Resources had increased its holding to 9.1% from 8.4%.

Mr Jagtiani runs the Dubai-based business Landmark Group, which has more than 600 shops in India, Spain and the Middle East. It has also diversified into sectors such as leisure, hotels and electronics.

He is also thought to have ties with Icelandic investment group Baugur, which has a 13% stake in Debenhams and owns House of Fraser.

Sportswear firm JJB Sports has backed Nike’s £285m takeover of Umbro after agreeing to sell its 10% stake in the Cheadle-based England kit maker. Roger Lane-Smith, JJB’s non-executive chairman, said: ``We believe that accepting Nike’s cash offer for Umbro is in the best interests of our shareholders."

The number of higher rate taxpayers has soared by 20% in the past five years as the Government failed to increase the top rate threshold in line with earnings, an accountancy firm said today.

UHY Hacker Young said the number of people paying higher rate income tax had risen by 20.4% since 2002/2003 to 3.7 million.

During the same period the level of basic rate taxpayers has increase by just 5.4% to 23 million.

The pound at 5pm was US$1.9855 compared to US$1.9863 at the previous close while the euro at 5pm was £0.7436 compared to £0.7447 at the previous close.