Thursday lunchtime business bulletin

Feb 7 2008 By Andrew Mernin

The £24bn owed to the taxpayer by Newcastle-based lender Northern Rock has been taken on to the public balance sheet, the Office for National Statistics has said.

The move means Government borrowing is now likely to breach the Treasury’s "golden rule" on debt not exceeding 40% of GDP income.

The ONS said: "The decision is based on a judgment that the public sector has the power to control Northern Rock’s general corporate policy."

BT and Yell were punished by investors today after the telecoms-based pair provided the City with cause for concern in third quarter results.

The mood of the market was not helped by trading in New York and nervousness ahead of the Bank of England’s decision on interest rates later in the session.

The FTSE 100 Index slipped 47.9 points to 5827.5 by mid-morning.

Yell was the biggest faller after the Yellow Pages and Yell.com directories business lowered revenues guidance for the current quarter because of the weaker economic environment in the UK.

Shares were off 46.75p at 283.25p, a drop of 14%, while BT was down 7% following a disappointing trading update.

Energy provider E.ON today became the latest firm to unveil inflation-busting price rises for gas and electricity customers.

The German-owned company, which used to be called Powergen, said gas prices were going up by 15% and electricity by 9.7% from tomorrow. The changes will affect nearly five million customers.

E.ON’s announcement follows other large price hikes this year by four other energy firms - British Gas, Scottish Power, Npower and EDF.

The pound at noon was US$1.9526 compared to US$1.9598 at the previous close while the euro at noon was £0.7489 compared to £0.7469 at the previous close.