The number of firms optimistic about their prospects outnumbered the pessimists by 23 per cent, the lowest figure since mid-1998.Orders were weak, with export sales especially poor, which the IoD said “augured badly” for manufacturing in the near term.Meanwhile, the Engineering Employers’ Federation, in a joint submission with groups representing some two million workers, urged the Chancellor to shelve further tax rises in favour of aid to ease industry’s plight. It called for larger R&D tax credits, investment in scientific training, reform of climate change levy and 100 per cent capital investment allowances.. The chief executive of British Airways, Rod Eddington, disclosed yesterday that the carrier is in talks with KLM about closer co-operation, but BA ruled out a full-scale merger with its Dutch counterpart. The chief executive of British Airways, Rod Eddington, disclosed yesterday that the carrier is in talks with KLM about closer co-operation, but BA ruled out a full-scale merger with its Dutch counterpart.
Mr Eddington is understood to have held discussions with KLM and a number of other European carriers with which BA already has links at an IATA conference in Madrid last week.The discussions centred on commercial alliances, including code-sharing agreements that might be developed in view of the “exceptional challenges” the industry is facing in the wake of 11 September.The Treasury is expected to announce today that it has agreed to continue providing UK carriers with insurance cover until the end of the year while they agree new arrangements with commercial insurers.Appearing on BBC’s Breakfast with Frost, Mr Eddington said: “We want and believe that European aviation has to consolidate. We are talking to KLM, [and] we are talking to other carriers … to see if there are ways we can work together more closely.”Mr Eddington said he believed that the 15 separate carriers in Europe would come down to perhaps three.But a BA spokesman stressed that a full-blown merger with KLM was not imminent.

The two airlines ended merger talks last year after deciding the regulatory obstacles were too great.A spokesman said: “If you are asking whether a full scale merger is back on the agenda, then the answer is no.”Mr Eddington also told the programme that he was hopeful of obtaining clearance in the US and UK for a transatlantic alliance with American Airlines by the end of the year.British and American officials are meeting in London today for the first time since 11 September for informal “talks about talks” over an open skies deal between the two countries.”We would certainly like to get together with American Airlines,” Mr Eddington said To do that, anti-trust immunity was needed. “We are hoping that the governments will be able to deliver that towards the end of this year.”Mr Eddington said that BA, which has already announced 7,000 job losses, might have to seek further savings. “We will survive, but we’re going to have to change the way we run our business, the things we do, in order to survive. We are going to have to tighten our belts – we’ve begun that process already, there may well be more things we have to do.”. About 1,500 new recruits will promote the HBOS brand in the business banking market over the next three years. About 1,500 new recruits will promote the HBOS brand in the business banking market over the next three years.
HBOS, created last month by the merger of Halifax and Bank of Scotland and seen here promoting its new logo, already has a 33 per cent share of the Scottish business banking market. It now aims to increase its presence in England and Wales, where business banking is dominated by the Big Four banks.

HBOS’s new staff will include 400 local managers to make decisions about the firms they will personally deal with.HBOS is also trying to grab market share with an internet banking service for businesses, called the E-Business Deposit Account.Most of the larger players in business banking have attracted criticism for the higher profit margins in the sector than on accounts for individuals. The Competition Commission identified a “complex monopoly” in business banking and has passed a report to the Department of Trade and Industry.. The new not-for-profit trust being set up to replace Railtrack is likely to have a standby loan of up to £1bn available to it from the Strategic Rail Authority to allay investor fears about its financial security. The new not-for-profit trust being set up to replace Railtrack is likely to have a standby loan of up to £1bn available to it from the Strategic Rail Authority to allay investor fears about its financial security.
Stephen Byers, the Secretary of State for Transport, is expected to provide details of how the trust, dubbed Newtrack, will be structured and funded amid fears that his treatment of Railtrack will make it much harder for the rail industry to attract private capital.The Government may also offer Railtrack shareholders interest-bearing bonds in Newtrack in an attempt to head off legal action by big institutional investors. Mr Byers has repeatedly stated that Railtrack shareholders will get “not a penny more” of taxpayers’ money in compensation so any offer of bonds would amount to a partial climbdown.The £1bn loan is designed to reassure investors that the company will not run into the same financial crisis as Railtrack if it were confronted by another Hatfield disaster.In the first instance, however, Newtrack would have to meet any contingencies from a cushion of reserves built over a period of time from retained surpluses.

This effectively means that the Government will always have to provide the new company with sufficient subsidies to pay interest to its bondholders and have enough left over to build up reserves.Railtrack sources pointed out that this was very similar to the restructuring scheme put to the Government by its financial advisers, Credit Suisse First Boston, in the summer.Steve Marshall, Railtrack’s chief executive, will renew his attack this week on the Government for placing Railtrack in administration, arguing that shareholders deserve fair compensation. Mr Marshall is speaking to the Railway Industry Association on Friday.”I am determined to ensure the facts are repeated as often as necessary until everyone gets the message,” he said.Mr Marshall will also be pressing ministers on their attitude towards the approach from German bank WestLB to take over the network, which could be worth 240p a share. “The administrators are under a duty to consider all alternatives and not just accept whatever blueprint the Government is trying to hatch as a done deal,” he added.. The Treasury is set to rewrite the rules governing its controversial Public Private Partnership in an attempt to encourage even greater private funding of public sector projects. The Treasury is set to rewrite the rules governing its controversial Public Private Partnership in an attempt to encourage even greater private funding of public sector projects.The changes, due to be announced shortly, are likely to provoke a political storm and prompt accusations from critics that the Government is cooking the books in favour of the PPP in an effort to take private sector funding still deeper into areas such as health and education.Treasury officials are working on a fundamental revision of the “Green Book”, which sets the standards for accounting for public investments.