Black cloud over Hollinger

THERE is no such thing as a done deal when it comes to Hollinger International. Despite the long and careful auction process for the Telegraph titles and the Spectator, which achieved the highest price ever paid for a British national newspaper, the ever-patient Barclay brothers could still be a short head from the finishing post.

Hollinger Inc, through which Lord Black holds his equity stake in the Telegraph, is unenthusiastic about the deal. It would have preferred a sale of the whole company, noting that the tax treatment of a partial sale could be disadvantageous to investors.

It also wants more detail on how the proceeds of the sale would be distributed. Given how close to financial ruin Black has come, it is not surprising that he wants to know more about how much cash, if any, he will receive once the legal claims are settled.

More encouraging for interim chief executive Gordon Paris, who has been instrumental in the sale of the Telegraph titles, is that dissident investors Tweedy, Browne - largely responsible for exposing the governance failings and alleged wrongful payments - seem happy with the sale.

This is despite the fact that the Hollinger International share price has fallen back since February's high point in the wake of the Delaware Court ruling.

Then there are the British hurdles. All the evidence suggests that Sir Frederick and Sir David Barclay have been benign owners of the Scotsman and The Business.

Given that they received knighthoods in the era of Labour government, it is hard to believe that anyone at the communications operator Ofcom is going to object at this stage to the offshore management of their business empire. The big task for the Barclay family now is to earn a return on the titles for which they have paid so heavily. Profit has not been a notable feature of their publishing investments so far.

By all accounts, the opportunities for serious cost cutting are very limited. They must also deal with the awkward figure of Richard Desmond, 50% owner of the West Ferry printing plant in London's Docklands.

All of this will make a decent economic return on the asset extremely hard. But the Barclays have proved themselves patient businessmen.

Rates on hold

AFTER two rapid-fire increases in Bank of England lending rates in May and June, it looks as if we will be granted a break next month.

The latest minutes from the Monetary Policy Committee make it clear that the June increase was, as suspected, the second instalment of a half-point rise to 4.5% designed to put inflation back on track. But it is not yet time to breathe a sigh of relief.

The labour market, one of the key factors in the Bank's deliberations, remains tight and consumer spending - judging from High Street data - is still rampant.

If there is a glimmer of hope for the Bank as it seeks to restrain prices and smother the housing boom, it is from the property market.

Surveys by both the Royal Institute of Chartered Surveyors and the estate agents show inquiries falling. The Halifax's upward revision of its house price index is largely based on historic, not forward looking data.

The combination of Mervyn King's new firm tone together with the full-point rise in base rates since November may well be having an impact. But no one should assume interest rates have reached a plateau.

On the contrary, the economy is still roaring away, unsecured borrowing is extraordinarily strong and we have the added factor of higher oil and utility prices.

Simon Rubinsohn of Gerrard expects the MPC to raise rates in August to 4.75%. The markets still take the view that interest rates will eventually peak at 5.25% in the first quarter of next year.

That will not be good news for Gordon Brown as Labour heads into a tricky Iraq-tinged general election campaign.

Ides of July

JULY 12 is going to be red letter day in British retailing. It is then that Stuart Rose of Marks & Spencer will unveil his recovery strategy for Marks & Spencer - if Philip Green has failed to seize the initiative beforehand.

It also will be the day that Sir Peter Davis of J Sainsbury faces shareholders who have seen very little uplift in the share price since his appointment on March 1 2000.

Research by the governance ginger group Pirc shows that since then, Davis has received £4.8m in cash pay and benefits and £3.6m in share options and awards.

Add to this his pension fund and the grand total comes to £10.7m. Nice work if you can get it.