Europe is also likely to stand firm and not cut rates for a while.

Telecoms companies are still suffering with the global economic downturn and, with the marketplace saturated with mobile phones, forecast growth rates are declining rapidly.

This has sadly been reflected with Motorola closing down its plant in Scotland this week with the loss of 3,000 jobs.

A report is due to be published next week stating that predicted revenues generated by mobile phones in 2005 will be just £5 billion, which will barely cover the cost of one third generation mobile license.


During the crazy 3G mobile auctions last year, the total spent on the licences was £22.5 billion by Vodafone, Orange, BT Cellnet, One-to-One and Hutchison.

With the companies facing huge debts over these costs, they are now realising how carried away they got during the telecom boom and are now paying the price.

Also this week, BT chairman Sir Iain Vallance has announced that he is to step down and hand over the chairmanship of BT to Sir Christopher Bland with effect from May 1.

On the technology front, old favourite Bookham Technology reported results on Wednesday, showing first quarter losses of £11.7 million versus an £8.5 million loss last time.

Not surprisingly, the chairman stated it is experiencing a reduction in demand and order referrals and is taking a very cost-conscious approach to the future. Its shares retreated.

Lucent Technologies of the US announced worse than expected losses to $3.7 billion.

This was not ideal, but amazingly the stock surged 14pc following an upbeat conference call with management and investors.

Finally, there has been increased activity among the banking sector, with Halifax and Bank of Scotland announcing merger plans to create a £28 billion giant to challenge the big four high street banks.

There are obviously fears over resulting job losses, but the Treasury and Department of Trade and Industry welcomed the news. This would enable them to put up some decent competition against the big four who currently dominate the sector and make big profits at the expense of private customers and small businesses.

Shares in both banks surged, which was a great boost to the public, as Halifax has more shareholders than any other British company at around three million.