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It also weakened against the euro, retreating more than 1.25p from record peaks of 56.79p set earlier yesterday. Sterling’s index against its main trading partners dived to 111.6 from 14-year highs of 113.6 at the start of trading yesterday.The Confederation of British Industry hailed the outcome as the “right decision”, saying it would boost long-term growth. “This should not be seen as a postponement of an inevitable rise, but as a signal that interest rates have peaked,” said chief economist Kate Barker.The Engineering Employers Federation said the Government should help drive down the pound. “The Government seems to regard its role as nothing more than an innocent bystander.” But Sir Ken Jackson, head of the engineering union, AEEU, said ministers were in a difficult position: “The Government does not have a magic wand.”The Bank issued no statement with its decision but analysts said sterling’s strength against the euro played a major part in the MPC decision.Recent GDP data showed growth slowed sharply in the first quarter, with manufacturers struggling to compete as the pound raised the price of exports and made imports cheaper.But there are worrying signs of inflation in the domestic economy, especially in the labour and housing markets and in the services sector. This was confirmed by figures from the Bank yesterday showing mortgage lending rising at its fastest rate on record.

Mortgage loans in March rose £4.13bn, the largest leap since records began in 1993.Analysts anticipate only one more quarter-point hike this year. Roger Bootle, of Capital Economics, said those forecasting rates peaking at 7.5 per cent were “whistling in the dark”. He said the Bank was “acutely aware” of mounting pressure on the Government to act over the pound, by direct intervention or by using the gilt markets.”If it were seen to be pushing up rates willy-nilly, it would know it was running the risk of a political response that may not be helpful,” he said.. The days of the supermarket loyalty card could be numbered after a decision by Safeway yesterday to scrap its ABC card in favour of lower prices.

The days of the supermarket loyalty card could be numbered after a decision by Safeway yesterday to scrap its ABC card in favour of lower prices.
Safeway, Britain’s fourth-biggest supermarket group, said it believed shoppers were tired of loyalty points and vouchers and preferred product offers and across-the-board lower prices.”We are saying the loyalty card has had its day,” said Simon Laffin, Safeway’s finance director “We are throwing down a challenge to the others. We don’t really think these cards work.”However, rival supermarkets immediately defended their cards. J Sainsbury said it was “definitely not” going to end its Reward card scheme which was launched in 1996. It is receiving 40,000 new applications every week, it said.Tesco, whose Clubcard has 10 million holders, said it would take advantage of Safeway’s decision by printing a further two million Tesco cards to fill the void “People do like loyalty cards.

We believe Safeway has dropped a clanger,” said Richard Brasher, the company’s marketing director.To replace its card, Safeway plans to offer 30 to 40 price cuts every week varying from store to store. This week’s offers include Kellogg’s Cornflakes, down to 45p from 99p, and Pepsi-Cola, to 49p from £1.35. The deals will be promoted locally rather than by television advertisements.Safeway admitted it would lose money on the offers, but said it needed to attract more customers on top of the 750,000 it claims to have enticed since last October. No new ABC points will be issued after 1 June, though customers will be able to redeem points until 30 September.. ScottishPower is to axe 1,600 jobs – one-fifth of the workforce – at its newly acquired US electricity business PacifiCorp as part of a $300m (£190m) cost-saving plan. ScottishPower is to axe 1,600 jobs – one-fifth of the workforce – at its newly acquired US electricity business PacifiCorp as part of a $300m (£190m) cost-saving plan.
The cutbacks will include the sale of the West Coast utility’s two corporate jets and helicopter and a massive reduction in corporate overheads.

The executive board of PacifiCorp is being halved in size and 320 corporate staff will lose their jobs.Sir Ian Robinson, chief executive of ScottishPower, said the cost reductions, to be implemented by 2004, would make PacifiCorp one of the 10 most efficient US utilities. PacifiCorp is also applying for regulatory approval to increase prices by 10 per cent in four of the six states it serves – Utah, Wyoming, Oregon and Washington.Despite the plans to cut jobs and raise prices, Alan Richardson, the head of ScottishPower’s US operation, maintained that it had been made “incredibly welcome” by commissioners, regulators and customers.ScottishPower was now looking to expand its presence in the US market through more acquisitions in both electricity and gas, Sir Ian said “We have good growth opportunities in the West and Mid West. We want to become a significant company with a significant business.”The target of $300m in cost savings is $75m to $100m higher than ScottishPower pencilled in when it launched its £4bn bid for PacifiCorp at the end of 1998. It is also aiming to achieve a $250m reduction in PacifiCorp’s capital expenditure.The PacifiCorp acquisition, completed in November, helped ScottishPower to increase underlying pre-tax profits in the year to 31 March by £91m to £736m. Reported profits were £1.16bn, including an exceptional net gain of £454m following the sale of half the group’s telecoms business, Thus.Profits this year will be £127m lower due to electricity and water price cuts at its UK businesses, which include Manweb and Southern Water.