US makes it ten out of ten

FEDERAL Reserve chairman Alan Greenspan has cut US interest rates for the 10th time this year in an attempt to boost the struggling American economy. As expected, he opted for a half a percentage point cut, taking the benchmark rate down to 2%, the lowest it has been since 1961, when President Eisenhower was making way for John F Kennedy in the White House.

Greenspan's aggressive action, which cheered Wall Street, follows a raft of depressing economic news. Last week, official figures showed that the US economy shrank for the first time in eight years in the quarter to September. Almost half a million Americans have lost their jobs, casting a pall over consumer spending, which accounts for two-thirds of national income.

Greenspan's move is something of a gamble as it leaves him little room for manoeuvre. With interest rates so low, the US could end up in a similar dilemma as Japan, whose rates are close to zero, leaving the central bank seriously constrained in its ability to combat a long-lasting recession.

The American gloom is mirrored in Europe. This week's CBI/MORI survey paints a grim picture of British manufacturing since 11 September. German unemployment rose by the most in almost three years in October to 3.92m, and Finance Minister Hans Eichel warned of more bad news to come. Economists in France are warning that industry is heading into recession.

Despite this, UK rates still stand at 4.5%, more than double the US figure. European rates are nearly double the US rate at 3.75%. Greenspan's decisive action intensifies the pressure on the Bank of England and the European Central Bank to follow his lead.

Tough at the top

THE City's top women are having a tough time of it. While Carol Galley of Merrill Lynch Investment Management squares up to her adversary, Wendy Mayall of Unilever, in a courtroom battle, London Stock Exchange chief executive Clara Furse is picking up the pieces after her failed bid for futures and options market Liffe.

Furse is putting on a brave face, though the letter of congratulation she sent to Jean-Francois Theodore, boss of victorious rival bidder Euronext, must have been written with gritted teeth. She says that the LSE was not to blame for the failure. On Tuesday, it reported better-than- expected operating profits of £34.2m, up 18% on last time. The shares rose 11p to 373 1/2p.

Far too discreet openly to dish the dirt on Liffe, Furse nonetheless leaves the impression that she thinks its chairman, Sir Brian Williamson, went for the most comfortable option when he plumped for a partnership with Euronext. Looking ahead, Furse says she has been in talks for months with several other exchanges. Four of these possibilities are 'interesting' and three are 'exciting'. Let's hope she is right.

The City is often derided as being one of the last bastions of male chauvinism. Nonetheless, Furse, the LSE's first female boss, was greeted as a breath of fresh air when she arrived this year. She now needs to prove herself by coming up with a credible alternative to the Liffe deal - and fast, or the LSE itself will be vulnerable to a takeover. Names being bandied around include the New York Stock Exchange and US tech market Nasdaq. Even Deutsche Borse, which had failed merger talks with the LSE last year, is being touted.

The feisty Furse says she feels empowered, not vulnerable, in the aftermath of the Liffe setback. She believes the LSE would be in a strong bargaining position in talks with any possible partner. That is true, but she should not overplay her hand, particularly as there is a perception that the LSE's insistence on its executives taking the top jobs was a major factor in the collapse of the Liffe merger. Furse has been given a second chance. City gallantry is unlikely to extend to a third.

On your Marks

MARKS & Spencer is finally showing tangible signs of recovery. The stores are restoring their appeal to their core clientele of mature ladies, who want reasonably priced classic clothes.

Even style-conscious shoppers are beginning to boast once again about the clever purchases they have made at Marks, to mix with their designer labels.

But the management is right not to boast too loudly. Results from the Per Una range from fashion guru George Davies are not included in the latest figures. It remains to be seen whether, once the novelty has worn off, it will attract trendy 20-somethings. Chairman Luc Vandevelde still has plenty to prove.