Bears survey rates topography and see a plateau

Sterling's trade-weighted index closed last night at its lowest level for more than eight months - and no wonder. The mood in the City has turned bearish, with a sense that the economy is coming off the boil so quickly that interest rates may well have peaked.

This looks like a good call. Imagine that you are a member of the Bank of England's monetary policy committee, concerned about the medium-term outlook for inflation. A couple of months ago everything seemed to be going well. Rates had been pushed up five times, and further increases in November and in February 2005 were in the market.

Since the summer, however, there has been little to justify a further tightening. Sure, yesterday's Halifax index showed a 1.4% increase in house prices last month, but the figure was laughed off - rightly so - by the City. Perhaps a more telling indicator of consumer sentiment was that new car sales last month were 2% down against the same month a year ago.

Survey evidence - for both manufacturing and services - points to a slowdown in activity over the coming months as dearer borrowing costs and the "soft spot" in the global economy affect demand.

Some moderation in the rate of growth was foreseen by the Bank of England in its August inflation report, but not this quickly. Moreover, the effects of higher interest rates have yet to have their full impact, since those who took out two-year fixes when rates hit rock bottom in 2003 will only start to feel the pain next year.

True, the labour market is tight, and there is a risk that pay bargainers may push for higher wage settlements as compensation for higher petrol prices.

But this won't show up this month or next, and in the interim inflation is below its target and growth is at - or even below - trend.

As such, the chances of a rate rise this year are now slim. Indeed, the next move could well be down.

Google gobbles

Everybody directly involved was doing their damnedest yesterday to play down news that Google is going into the retail book trade. Or rather that it is offering its services as a new electronic interface between book buyers and sellers.

Google's typically open-armed style in such matters - in this case promising that publishers and retailers of all shapes and sizes will be welcomed into the new Google Print community - may well be good news for the publish ing industry generally, helping to generate fresh interest in the traditional printed word. Also, few analysts see any substantive impact on Amazon's position as the web's king of books.

But somebody, somewhere, will end up paying for Google's listings - and with the intense price competitiveness that the internet brings, the betting is that it will not be the consumer.

Established businesses in all sorts of sectors are looking at Google and wondering whether its a friend or a foe. Its position as the effective gateway to the web gives it, in some form or another, the ability to take a tiny clip from every cyber coin spent.

During the boom, e-missionaries such as John Chambers of Cisco used to talk about stodgy old companies in each and every commercial sector getting Amazoned.

He was only partially right at the time, but the march of technology has given us a similar, albeit more subtle, verb. Google News did it to newspapers, Wall Street got a taste during Google's flotation. Now that publishing has been Googled, it will be interesting to see who is next.

Rapture revisited

Try to read the following without scoffing: "Britain now has a number of beacons of hope in the fight against fraud, reminiscent of New York's success in reversing a supposedly unstoppable wave of law-breaking in the 1990s. Too many people said it couldn't be done. Mayor Giuliani proved it could and now a string of UK initiatives are setting a similar example on economic crime. There's too much unthinking pessimism. There is nothing inevitable about fraud. Insight and initiative can turn the tide."

This is Ros Wright, the former director of the Serious Fraud Office, speaking in her new guise as chair of the Fraud Advisory Panel, an "independent watchdog" funded by the Institute of Chartered Accountants in England & Wales.

The panel is keen, in its annual review published yesterday, to highlight three aspects to "getting it right".

1) High-level strategic thinking. The response to fraud needs "a holistic strategy rather than through piecemeal initiatives".

2) Police-business partnerships. "Much closer cooperation between the police and business is essential. Law enforcement can never do everything by itself."

3) Cultural change. "Long-term fraud reduction also depends on informing, training and motivating all employees. Economic crime is too widespread to be tackled only by a few specialists."

"Of course fraud is very far from disappearing," Mrs Wright added, "so our rapture is modified. Progress has been made but it needs to be consolidated and built on."

Our rapture remains non-existent.