Thursday morning business bulletin

Jun 19 2008 By Andrew Mernin

Halifax Bank of Scotland today warned that property prices are likely to fall by 9% this year - a near doubling of previous expectations as the bank predicts deepening gloom for the housing market.

The UK’s biggest mortgage lender said in an update on trading ahead of its £4bn cash call to investors that the forecast for the property sector will lead to higher bad debt charges, with mortgage arrears levels already rising.

It added that write-downs amid the credit crunch had risen by £58m to £1.03bn since the end of March.

The resignation of Sir John Gieve will mark the end of a curtailed and controversial tenure as the Bank of England’s deputy governor.

Last year he was accused of sleeping on the job during the Northern Rock fiasco in a stinging attack from the Treasury Select Committee.

But it was not the first time he had to weather a political storm, having previously survived a 30-year career in the civil service punctuated by scandal.

His tenure as Home Office permanent secretary from 2001/05 included the David Blunkett visa affair and the foreign prisoner deportation row.

He and other civil servants were criticised by Opposition MPs for failing to recall how the visa for Mr Blunkett’s ex-lover’s nanny came to be fast-tracked.

But Sir Alan Budd, who led an inquiry into the affair, said he had no reason to believe anyone involved had deliberately withheld information.

Cadbury today said "good growth" from core brands including Dairy Milk had given it an edge over the rest of the UK confectionery market.

The company added that price rises in order to recoup higher costs and strong demand in emerging markets meant overall revenues for the first half of this year were likely to exceed the 4% to 6% target previously set by the firm.

Cadbury shares opened more than 2% higher following the trading update.

In its domestic market, Cadbury said revenues growth was likely to be ahead of the wider confectionery market, which is 2% stronger so far this year.

It said: "The exit from some less profitable promotions has been more than offset by good growth in core brands, including Cadbury Dairy Milk."

Cadbury is now focused on chocolate, sweets and gum after spinning off its drinks arm and dropping Schweppes from its name.

The pound at 8am was US$1.9621 compared to US$1.9567 at the previous close while the euro at 8am was £0.7937  compared to £0.7923 at the previous close.