The areas chosen for the trial are Newcastle South Wales and in Ealing and Kensington in London

The areas chosen for the trial are Newcastle, South Wales and in Ealing and Kensington in London.The initiative is one of a series being launched by Ian Harley, Abbey’s chief executive as he seeks to pep up Abbey’s flagging share price and remove the threat of takeover which has been hanging over the group since late last year.Mr Harley said that Abbey would definitely look at Equitable Life, the mutual insurer put up for sale, but he was cautious about the risk of overspending and insisted he would not consider issuing new equity to fund a takeover deal.Abbey shares fell 28p to 740p yesterday despite figures showing profits up 5 per cent to £922m, in the first six months.The results were ahead of City forecasts but analysts said that most of the growth had come from lower bad-debt provisions rather than increased revenue.They were also concerned that Abbey had not been able to reverse the margin slide in its core retail operations and that costs were ballooning despite a branch reorganisation announced earlier this year.. Britain’s leading employers’ organisation yesterday called on the Bank of England to send out a clear signal next week that interest rates had peaked. The Confederation of British Industry said a rate cut should come “sooner rather than later”, as its latest survey found business confidence plunging to its lowest level since the end of the 1998 global financial crisis. Britain’s leading employers’ organisation yesterday called on the Bank of England to send out a clear signal next week that interest rates had peaked. The Confederation of British Industry said a rate cut should come “sooner rather than later”, as its latest survey found business confidence plunging to its lowest level since the end of the 1998 global financial crisis.
Business confidence and export prospects fell at their sharpest rate since January 1999 while orders for both UK and overseas buyers tumbled at their sharpest rate for a year.Nick Reilly, head of car giant Vauxhall and chair of the CBI’s economic affairs committee, said: “Manufacturing is faltering and risks slipping back into a downturn.

We urge the Monetary Policy Committee to leave rates on hold next week and give a signal that the next movement will be down. If the trends indicated by this survey continue to weaken, a quarter point cut would be the right medicine sooner rather than later.”Mr Reilly said the CBI had only held back from calling for a rate cut – its first since June 1999 – because of worries over inflationary pressure in other parts of the economy. These included a tight labour market, fear of a sudden fall in the value of the pound and the huge injection of public spending announced last week.”As far as manufacturing alone is concerned we would recommend a cut today,” Mr Reilly said. “As to the wider economy, we are uncertain as to whether consumer spending will slow fast enough given the large rises in public spending.”His comments came as Ian Plenderleith, a member of the MPC, said a sudden fall in the pound, which has so far restrained inflation, could cause overheating unless consumer demand slowed sharply.The CBI’s survey showed that shortages of skilled workers were at their most acute for three years, especially for aerospace and motor vehicle producers.

Meanwhile, industry’s unit costs failed to fall for the first time in two years, mainly due to rising oil prices. As a result, the CBI said manufacturers’ profit margins were squeezed as the prices they could charge fell, continuing a four-year pattern.Mr Reilly said a fear of falling rates of return on capital investments was acting as a deterrent to invest – investment intentions are at their most negative for 15 months. “This is a worrying signal that companies remain very concerned about their profitability,” he said. “This is a major cause for concern as it will lead to a shrinking manufacturing supply base and the ability of industry to meet demand without inflationary pressures would be undermined.”The CBI survey is the latest to paint a gloomy picture of the manufacturing sector. The Institute of Directors, British Chambers of Commerce and Dun & Bradstreet have reported sharp falls in business optimism.

On Monday, the Office for National Statistics said manufacturers’ rates of return had fallen to a six-year low.However, the CBI may be accused of crying wolf. Although it accurately predicted the recessions of 1979 and 1990, it forecast a severe slump in 1998 that never materialised. Economist Stewart Robertson, of Lombard Street Research, said: “Unfortunately, surveys have become a means of lobbying, rather than a useful guide to conditions in manufacturing.”In his speech to the Aberdeen chamber of commerce, Mr Plenderleith, the Bank’s executive director, acknowledged that manufacturers had been hit “most severely” by the strong pound. But he said the MPC had to be vigilant in case of a sudden fall in the pound. “The boost that could bring to external demand could be accommodated, without strain on the supply capacity of the economy as a whole, if domestic demand has moderated,” he said.. Hansgeorg Hofmann, the former Dresdner Bank executive who has built up a hostile 17 per cent stake in Germany’s Commerzbank, said he was resuming the search for a foreign buyer for Commerzbank following yesterday’s collapse of merger talks with Dresdner. Hansgeorg Hofmann, the former Dresdner Bank executive who has built up a hostile 17 per cent stake in Germany’s Commerzbank, said he was resuming the search for a foreign buyer for Commerzbank following yesterday’s collapse of merger talks with Dresdner.
The talks broke down after six weeks over the inability of the banks to come up with terms that would satisfy their big shareholders, in particular Allianz, the insurance giant which owns 21 per cent of Dresdner.Mr Hofmann, who suffered a setback last week after the German banking regulator blocked him from exercising the voting rights he and his partners had amassed, said before he boarded a plane from Frankfurt to London yesterday: “We’ll certainly see if we can get something together.

We will certainly have conversations with the people we talked to before Commerzbank started talking with Dresdner.”Mr Hofmann quit Dresdner Bank after an alleged tax evasion scandal, came out publicly against attempts by Martin Kohlhaussen, the Commerzbank chief executive, to strike a deal with his former employer, insisting that a takeover of Commerzbank by a foreign bank would create more value.UK-based HSBC which earlier this week completed its purchase of France’s Crédit Commercial de France was linked with Commerzbank earlier this year and has been open about its desire to use CCF as a bridgehead into the eurozone. However, analysts said a French or Swiss bank such as Société Générale or Credit Suisse might be a more obvious buyer.Dresdner said yesterday that it was not in talks with BNP-Paribas with whom it has a cross-shareholding arrangement about deepening the co-operation.. Shares in egg took another dive yesterday as bigger than expected losses fuelled City fears that attempts by the traditional banks to claw back market share were starting to draw blood. Shares in egg took another dive yesterday as bigger than expected losses fuelled City fears that attempts by the traditional banks to claw back market share were starting to draw blood.
Mike Harris, chief executive insisted that yesterday’s first-half loss of £80.7m was in line with internal forecasts at the time of flotation in June, adding that egg was still on course to meet the target of break-even by the fourth quarter of next year. However, the figures did little to dent City analysts’ concerns that attempts by bricks and mortar banks to defend market share with loss-leading products of their own are going to make it harder for egg to meet this target.Shares in egg, which was floated at 160p, fell nearly 5 per cent to 127.5p yesterday.Egg’s attempts to build a profitable business depend on being able to attract customers with cheap deals and then cross-sell other profitable products”Market conditions are much tougher,” Mr Harris said, “But we are much tougher too, compared with where we are when we set that target We now have built the products. We have customers flooding in.”More than 310,000 customers had signed up over the half, taking total customers to 1.1m. The egg chief executive said that customer loyalty had remained high despite attempts to reduce losses by cutting deposit rates to more economic levels, while credit card balances were higher than anticipated.Paul Gratton, chief operating officer said that only 20,000 deposit customers had left and most of those were old postal account customers who had decided that the internet was not for them.