YP75: China tightens lending while UK high street bounces back

On Tuesday, the People's Bank of China announced that it would tighten lending by increasing the reserve requirements of leading banks in what was seen as an attempt to cool the domestic economy. The news followed a near 18 per cent increase in Chinese exports during December while imports surged 56 per cent over the same period.

Here in the UK, a report from the British Retail Consortium showed that UK retailers enjoyed the best Christmas trading period for eight years with the cold weather snap leading to a strong rise in winter clothes sales.

Meanwhile, a senior member of the Bank of England's Monetary Policy Committee warned that markets should not assume that interest rates would stay at 0.5 per cent throughout 2010, particularly if inflation starts to move higher.

Leeds-based Northern Foods reported a freeze on underlying revenue, despite a sharp decline in its frozen food division. The 11 per cent drop in revenue across frozen foods was offset by strong growth in the bakery and chilled food divisions. The company recently announced the loss of 220 jobs due to a push towards enhanced technology within the production of the Fox's biscuit brand.

Wakefield energy services company Cape announced a multi-million-pound contract to provide specialist services to the Royal Navy's new generation of aircraft carriers.

The joint collaboration, with Tyne & Wear firm Pyeroy Ltd, is for an initial nine-year period and is worth more than 100m. The group added that it expects work to begin in summer 2011 with the first vessel ready for service in 2016.

A significant cost-saving programme over the past 12 months appears to be delivering rewards at Hessle-based Fenner. The company is encouraged with trading in the first few months of the financial year and expects attractive earnings growth going forward. Not only have the declines in revenue witnessed over 2009 slowed but operating profit is also increasing.

Fenner, which distributes conveyor belting and reinforced precision polymer products, has clearly benefited from a recovery in the mining sector with the FTSE 350 Mining Index having more than doubled in the past year.

Despite what SIG call "exceptionally challenging conditions" throughout 2009, the company expects to meet analyst

consensus forecasts for pre-tax profit of 60m.

The group, which provides building products to the European markets, reported declines in sales of 19 per cent in the UK and 35 per cent across Ireland, also highlighting the poor weather at the year end which led to site closures.

The FTSE 250 firm, based in Sheffield, has dramatically reduced net debt to 260m over the past year.