A marked slowdown in the rate of growth of manufacturing output yesterday relaxed some of the pressures for further interest rate

A marked slowdown in the rate of growth of manufacturing output yesterday relaxed some of the pressures for further interest rate rises, as the markets warmed to evidence of cooling inflationary pressures. British Gas must at present keep annual price increases to inflation minus 4 percentage points.Ms Spottiswoode is expected to give a robust performance before the Commons committee. Ofgas said, however: “Our line is that the Government sold the companies to the private sector. It is very much a question for the utilities todecide what to pay their people.”The companies defend the pay levels on the grounds that they are set by independent remuneration committees and not by negotiation with the executives themselves.Ofgas also holds the view that Mr Brown’s salary cannot be seen as damaging for consumers. The issue regained prominence on Monday when it emerged that Ed Wallis, chief executive of PowerGen, made more than £1m last year through exercising share options, in addition to his £400,000 pay.The Labour Party has called for increased powers for the regulators to control “boardroom excesses and greed”.

She is the only regulator yet earmarked by the committee to give evidence into its inquiry into remuneration in the utilities.
Two weeks ago, the committee interrogated Cedric Brown,. Ofgas confirmed that it has been approached by the committee with a view to Ms Spottiswoode appearing on 7 March. The row over pay for utility bosses will reach new heights next month if the Commons Employment Select Committee proceeds with plans to question Clare Spottiswoode, director-general of the gas regulator, Ofgas. Dixons, which remained committed to the high street, was one group that stood to benefit, they said.News of the Rumbelows closure came as Thorn EMI announced third-quarter results showing that, even including the dismal Rumbelows performance, group pre-tax profits increased by 25 per cent to £334m on sales up slightly to £3.4bn in the nine months to 31December.The record label EMI boosted profits by 19 per cent to £252m, and the HMV chain of record stores more than doubled profits to £14m.. Five such branches exist (the first two are already making a profit) but Thorn plans a chain of up to 120.The Labour Party pounced on the Rumbelows closure as an indication of Britain’s fragile economic recovery. Ian McCartney, shadow employment minister, described it as “a hammer-blow to any supposed feelgood factor”.The shopworkers’ union Usdaw said it had not been consulted about the Rumbelows decision and would seek a meeting with Thorn EMI to try to ensure good severance terms.Though Thorn EMI’s shares slipped 12p to 1,037p, City analysts welcomed the move saying it would take some capacity out of a crowded market.

It was left like a beached whale.”Rumbelows started life in 1971 when Thorn acquired an Essex and Hertfordshire group of shops called Sidney Rumbelow’s. In spite of constant re-structuring, the business always struggled and is estimated to have lost a total of £80m over the last 10 years.The closure of the chain will cost Thorn EMI a total of £116m, of which £56.7m relates to property and other fixed-asset write-offs. A further £34m will be allocated for redundancies.The company said it would concentrate its energies in the high street on Radio Rentals and the fledgeling Crazy George chain.Crazy George stores offer rent-to-own schemes on electrical appliances to so-called cash-constrained customers who have no other access to credit. They haven’t worked, so you have to make a decision and get it out of the way.”Sir Colin said the industry was over-supplied and that Rumbelows was only a small player.Experts said the stores were in the wrong place selling too narrow a range of goods from premises too small for their purpose. Clive Vaughan of retail consultants Verdict Research said: “Rumbelows was not big enough to take on Dixons and was trying to sell both brown goods and white goods in stores not big enough to stock the ranges offered by the out-of-town superstores.

In addition the 36 Fona shops, an experimental concept offering rent-to-own schemes on items such as televisions and videos, will also close, bringing total job losses to 2,900.
Rumbelows has been losing £12m a year and has never made a profit in its 24 years of existence.Thorn EMI’s chairman, Sir Colin Southgate, said: “It’s very sad, and all the Rumbelows staff have worked terrifically hard But we’ve been testing new ideas for seven years. The shutters will come down on all 285 Rumbelows branches by the end of April. Brutal competition on the high street and the drift towards out-of-town shopping claimed a significant victim yesterday when Thorn EMI confirmed it was pulling the plug on Rumbelows, its ill-starred chain of electrical stores. The Chancellor and Governor’s problem is that they must decide before then whether to let the economy glide or fire another interest rate retro-rocket instead.As in space, the risks are high and the margin for error very narrow.. For the Treasury spokesman it was a welcome slowdown to a more sustainable rate of future growth. The City chose to see it from the same perspective.But for some analysts it was evidence of something potentially more important – the first hint of a distinct slow-down due to the tightening of policy.Rising taxes, rising interest rates and a sense that the authorities are determined to fire the retro-rockets far earlier than they did the last time the economy went into orbit may already be having an impact in dampening down economic activity.Nobody will know for certain whether – and how fast – the economy is slowing down until the early summer. The instruments meanwhile are throwing up some distinctly ambiguous data.Yesterday’s figures are a case in point.

They seem to be sending conflicting signals to the Treasury and Bank. Industrial production recovered sharply in December, but much of the acceleration was due to increased output of energy as a mild November gaveway to a cool, wet December.For the fourth quarter the industrial and manufacturing sectors of the economy grew faster than the analysts had expected, but slower than in the year as a whole. It rarely makes sense in a bid situation to make an early decision one way or the other. Flemings, which advises the Trust, is as aware of that as any. Its advice that the Trust accepts without giving Wellcome a fair chance to come up with a white knight remains one of the unexplained curiosities of this takeover.Boldly flying planet Sterling A US/Soviet link-up in space looks like a doddle compared with the task now facing Ken and Eddie. They are trying to achieve a safe re-entry for the UK economy after a year in which it has been travelling at an unsustainablespeed.