Tuesday morning business bulletin

Jun 17 2008 By Andrew Mernin

Premier Inn and Costa Coffee owner Whitbread led a strong session today as investors cheered the group’s first quarter figures.

Continued sales growth at the leisure firm sent shares up nearly 5% - or 47p to 1269p - in early trade, earning Whitbread a place at the top of the risers board.

The wider FTSE 100 Index rose 47.8 points to 5842.4, with the mood buoyant despite inflation figures due out later, which are expected to kick-off a series of letters between the Bank of England and Chancellor Alistair Darling.

Consumer Prices Index inflation is widely forecast to have risen high enough to prompt Bank Governor Mervyn King to pen an open letter of explanation to Mr Darling.

An easing back of oil prices from yesterday’s near 140 US dollar a barrel mark helped boost trade, with banks and miners joining Whitbread in making gains.

Halifax Bank of Scotland rose 13.5p to 329.5p ahead of this week’s keenly awaited trading statement. Barclays was also up a further 2% after yesterday’s surge on news it is mulling a fundraising move.

New housing starts will plummet this year to the lowest level seen since 1945, an industry organisation warned today.

Around 147,000 new homes will be started in 2008 - a fall of 27% from last year - as the impact of the credit crunch is felt, the Construction Products Association said.

This will put Government housing targets in jeopardy, the body warned. Prime Minister Gordon Brown has pledged to build three million new homes by 2020.

But the association’s chief executive, Michael Ankers, said: ``To be starting fewer new homes than at any time over the last 60 years illustrates the scale of the problem we now face.

``Unless something is done urgently to address this problem, the capacity in the industry will be cut to a level which will take a long time to build up and it will not be able to meet the inevitable pent up demand for new housing."

Transport firm Wincanton today withdrew its offer for rival TDG after admitting a deal was ``not in the best interests of shareholders".

The Wiltshire-based logistics firm, which works for major retailers including Sainsbury’s, Asda and Argos, tabled a proposal worth £228.6m in April, bettering an offer made by investment firm Laxey Partners in February.

Wincanton carried out due diligence and said last month the board of TDG agreed there was merit in exploring the combination of the two businesses, in terms of operational overlap and sector and geographic coverage.

But Wincanton said today it was no longer interested in going through with its proposed offer for TDG, although it has the right to return if Laxey Partners or another third party agrees a deal with the TDG board.

The pound at 9am was US$1.9660 compared to US$1.9636 at the previous close while the euro at 9am was £0.7890  compared to £0.7881 at the previous close.