Coordinated efforts across the National Health Service to reduce its dependence on expensive temporary staff from the private sector prompted a profits warning yesterday from Reed Health, one of the biggest suppliers of agency nurses. Bt Group, the telecoms company, yesterday said it had passed a milestone in its bid to focus on new broadband technology some 10 months ahead of schedule.
The company said it had hit its target to sign up 2 million wholesale broadband internet connections during 2004 less than two months into the year.The former state-owned monopoly, which is moving to cut its dependence on its declining fixed-line business, said the latest million connections came in a little over eight months.The company said that of the 2 million connections, about half was accounted for by other internet service providers, which buy capacity from BT. He said he was forecasting the FTSE 100 to end the year at 4,850, a gain of more than 8 per cent. “The UK is forecast to grow reasonably strongly this year so mid-cap stocks look good play,” he said.Mr Batstone warned that the weakness of the dollar, which would harm earnings for the multinationals in the FTSE 100, and rising interest rates, could put a brake on the rise.Market watchers said some of the FTSE’s buoyancy came from relief that Standard Life, Europe’s largest insurer, had successfully completed its sale of £7.5bn of equities without disrupting the overall market.. The FTSE 100 hit a 19-month high before falling back into negative territory while the FTSE 250 index of mid-sized companies surged to a two-year closing high.”There has been a sea change in sentiment in the course of just the last couple of sessions,” said Jeremy Batstone, head of investment strategy at Fyshe Group. Rates peaked at 15 per cent in 1990.Stocks surged in London yesterday amid optimism over the UK economy. “If no action is taken and higher inflation starts to take hold, interest rates are likely to rise to an even higher level in order to reduce inflation.

This would generate higher economic costs in terms of lower output and employment,” he said, adding that even if rates rose by a half point to 4.5 per cent, as the financial markets predict, this would still be low by historical standards. “The latest indicators suggest growth is rising across all three and that the prospects are for growth to continue. Growth in international economies benefits London, where many firms are more exposed to international markets than in other parts of the country.”The latest monthly report on the capital’s economy showed that the number of bus and Tube passengers had hit a nine-year high, tourism remained strong, despite the slump in the dollar, optimism is rising among business managers and confidence among manufacturers at its highest since 1997.Mr Melville, who stressed he was not speaking for the GLA or Ken Livingstone, the Mayor of London, said it was better for interest rates to rise now to maintain economic stability and low inflation. The Bank of England must not delay the rises in interest rates that will be needed to keep inflation under control, a senior Greater London Authority economist said yesterday.
The capital is heading for a year of “healthy growth” buoyed up by a robust performance for the British and world economies, Duncan Melville said. Lindsay Owen-Jones, the chairman, said: “I would say that in terms of turnover we aim to beat the 2003 figure for internal growth.” Last year, internal sales, excluding currency effects, acquisitions and divestments, rose by 7.1 per cent.

The resurgent euro knocked group sales by 1.8 per cent but its operating margin was stronger at 14 per cent against 12.9 per cent the previous year.Mr Owen-Jones said the group, which recently unveiled plans to tidy up its shareholding structure, planned to hang on to its 20 per cent stake in Sanofi-Synthelabo if the French drug group succeeds with its hostile takeover bid for Aventis.L’Oreal intends to ask investors to back the decision of its two biggest shareholders – Switzerland’s Nestle and the billionaire Bettencourt family of France – to end a 30-year agreement that gave them control of the cosmetics giant through Gespral, a company that owned 54 per cent of its stock.After the move, the Bettencourts will have a 27.5 per cent stake and Nestle a 26 per cent holding.. L’Oreal Has set its sights on notching up two decades of consecutive annual double-digit growth after reporting a 13.5 per cent rise in profit last year. According to industry surveys, manufacturing activity was running at a four-year high in January and February. “That may be true but it’s not what I’m seeing,” Mr Williamson said.The restructuring would allow the company to boost investment in its portfolio of new products and process development, and improve its long-term profitability.Analysts, who lowered forecasts in October after the company said first-half profits would be hit by weak demand, were expecting pre-tax profits of about £1m for the year to 30 March.. “This is not a ’shock horror’ issue, although obviously it’s a sad day.”He said UK demand for its medical and optical plastic had continued to grow, while demand for its automotive components had declined but at a much slower rate than for electronics. The announcement will dent hopes that the UK is on the brink of a firm rebound in manufacturing after a three-year slump.Carclo said second-half operating profits would be “modestly below expectations” and the company would have to take a £3.5m charge for shutting the three plants. Its shares closed down 4p at 43.5p.The three plants being shut are a tooling factory in Burgess Hill, Sussex, a small site at Hatfield, Hertfordshire, and a factory at Harthill, near Glasgow.

Ian Williamson, Carclo’s chief executive, said the closures followed a three-year decline in demand for plastics for electronic office and telecoms equipment within the UK. We expect he will be named and see the board’s formation of a search process as properly discharging its fiduciary duties to shareholders.”Mr Daft, 60, has spent 30 years at Coke and took over as chairman in 2000 He said he had always intended to retire after five years. “Over the past four years, we have accomplished a great deal. Today, our brands are stronger and our global production and marketing system has been restored to health.”Coke’s share price has gone nowhere since Mr Daft took the helm.