Sharewatch with Matthew Durrands stockbroker with Gerrard, regional office address: Jupiter House, Station Road, Cambridge, tel: 01223 454000

LAST week saw the publication of the minutes for the October Monetary Policy Committee (MPC) meeting, the austere body charged with setting interest rates every month. The MPC left the cost of borrowing unchanged at 4 per cent earlier in the month. However, the minutes have revealed three of the nine voted for a quarter point cut. This has caught everyone off guard and the odds on a cut before Christmas have tumbled.

The Chancellor also plonked his size 12 hob nail boots into the melting pot by saying that the firemans' strike should be viewed against the background of the slowing global economy and that their pay demands must be resisted. Coming in the same week that the press has latched onto a potential £7billion hole in the public accounts, this has been a bad five days for the prudent Chancellor.

All this, of course, has been happily ignored by a stock market that is still punch drunk after the previous fortnight's surge over 4000. This has also been quite unexpected and is explicable only so far as that everyone was previously so utterly miserable that an absurdly strong rally was almost inevitable. This contrarian logic can be infuriatingly true at times, although we should be thankful for the reminder that share prices can go up as well as down.

The past couple of weeks have brought some sunshine to the clothing retailers. Until then, the long, dry Indian summer had meant that the autumn ranges were sitting on dusty shelves. However, two wet weekends and a couple of sharp frosts later and apparently everything is back to normal, at least according to Debenhams and Matalan.

It is very nice to see the FTSE 100 over 4000 again. Let us just hope that nothing skeletal comes out of the closet now that the market seems to be back on the rails.


Share-dealing questions with Andrew Wadsley, of Norwich & Peterborough Sharedealing Services, Cathedral Square, Peterborough, tel 01733 896949.

Q: IS Dixons looking for further expansion of its overseas operations?

A: Yes it is. Dixons, the Curry's to PC World group, has recently strengthened its presence in continental Europe with a £230m deal to take control of Italy's second biggest electrical chain.

Dixons, which over the next few years expects up to half of its profits growth to come from Europe, has exercised an option it had to acquire 71 per cent of UniEuro, bringing its stake to 96 per cent.

The remainder of UniEuro's shares are held by the management of the Italian company as part of an incentive package.

Dixons took the option of assuming control of UniEuro twelve months earlier than was expected after becoming convinced that it was a strong acquisition for the group.

Dixons believes the Italian firm has good local management and growth potential. With a total of 88 stores, mainly in Northern Italy, UniEuro last year produced earnings of 43 million euros on sales of 465 million euros.

Even without implementing a cost-reduction programme, Dixons expects the Italian company to contribute £9million of pre-tax profits this year and about £40million next year.

Analysts in the City expect Dixons Group to make full-year pre-tax profits of around £344million


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