Wednesday morning business bulletin

May 7 2008 By Andrew Mernin

Budget airline easyJet said today that soaring fuel costs caused half-year losses to more than double as it warned that the rocketing cost of crude oil would put many players out of business.

But the no-frills carrier said it would survive where others failed as it insisted its low-cost business model could see the group through the fuel price woes.

The group reported underlying pre-tax losses of £41.4m in the six months to March 31, excluding recent acquisition GB Airways, against £17.1m the year before, with earnings hit by a £67m hike in its fuel bill.

Bank of England policymakers will begin their two-day deliberations on interest rates today amid further signs of a falling housing market and an economic slowdown.

But inflation fears mean the bank’s Monetary Policy Committee (MPC) is expected to keep borrowing costs steady at 5% tomorrow despite gloomy economic data.

House prices recorded their first annual drop for 12 years in April as the credit crunch tightened its grip on mortgage lending.

And wider economic indicators in the past month have also been poor, with GDP slowing to 0.4% in the first quarter of 2008 as service sector activity slows.

Gaming firm Rank today said there had been a "modest improvement" in trading at its Mecca bingo halls, despite a 13% fall in admissions this year.

Mecca’s like-for-like revenues declined 14% in the 17 weeks to April 27, compared with the 17.3% fall seen in the final four months of last year.

The industry is under pressure because of a UK-wide smoking ban, new gambling laws and a double tax burden.

Rank, which also operates Grosvenor Casinos and the Blue Square betting business, said it had been encouraged by its performance in the face of a difficult trading environment.

The pound at 9am was US$1.9621 compared to US$1.9741 at the previous close while the euro at 9am was £0.7897  compared to £0.7879 at the previous close.