Wednesday morning's business news

Aug 20 2008 By Graeme King

An interest rate increase was ruled out this month because of the risk that it might make the economic downturn ``unnecessarily deep“, the Bank of England revealed today.

Monetary Policy Committee (MPC) member Tim Besley voted to increase the cost of borrowing by 0.25% to 5.25%, minutes of this month’s meeting showed. It was the second month in a row he argued for a rate hike.

But seven members chose to keep rate steady at 5% and the other committee member, David Blanchflower, voted for a rate cut.

House of Fraser says it is ready to roll out a host of high fashion brands across its revamped department stores, despite facing ``difficult“ trading conditions.

The chain - owned by Icelandic investment group Baugur - is now aiming at the higher end of the market and is on track to spend £150m on an overhaul of its stores by the end of this year.

Major brands set for launch include Lauren - the new womenswear line by Ralph Lauren - while the chain has also attracted other leading designers such as Anya Hindmarch, whose I’m Not A Plastic Bag eco-bag was a global sell-out last year.

EAST coast mainline operator National Express is amongst the four runners in the race for a major franchise deal to run South-East rail services.

The new South Central franchise will be contested by National Express, Stagecoach, Govia - a joint venture between Go-Ahead and Keolis - and NedRailways, the Department for Transport has announced.

The new deal will include the existing Southern franchise and Gatwick Express services, as well as the Tonbridge to Redhill route currently under the Southeastern franchise. Govia is the current operator of Southern services.

The FTSE-100 index at 9:45am was up 38.7 at 5359.1.

The pound at 10am was worth 1.8599 dollars compared to 1.8648 dollars at the previous close.

The euro at 10am was worth 0.7933 pounds compared to 0.7904 pounds at the previous close.