In the three months to May underlying export volumes grew by 2.7 per cent, while import volumes rose by 0.6 per cent. The Office for National Statistics said the trend in the trade deficit was narrowing.The growth in exports was strongest in intermediate goods such as electronic components and car parts. There was no sign of increased imports of consumer goods despite strong retail sales growth during the past few months.The one, tentative sign that the trade position is starting to suffer came from an increase in the deficit with non-EU countries last month. A small increase in imports and drop in export sales put it pounds 713m in the red, against pounds 584m in May.Despite the favourable figures, there was widespread gloom about Britain’s trade prospects. “It takes time for a loss of competitiveness to feed through into actual volumes,” said Kevin Darlington at Hoare Govett.

But collapsing export order books indicated that this was imminent, he said.The City expects the Bank of England’s Monetary Policy Committee to increase the level of interest rates to 7 per cent despite concerns about a future slump in exports.Eddie George, the Bank’s Governor said earlier this week that the cost of borrowing had to be set with the whole economy in mind.. Sir Colin Marshall yesterday collected his third chairmanship of a large British company after Siebe, the engineering group, announced that he would be taking over when its founder and current chairman, Barrie Stephens, steps down in May next year. Sir Colin is already chairman of British Airways and chairman of the international motor distributor and marketing group Inchcape in addition to being deputy chairman of British Telecom, president of the Confederation of British Industry, a non-executive director of the banking group, HSBC Holdings, and a director of the New York Stock Exchange.
He rejected suggestions, however, that he was in danger of spreading his skills too thinly. In theory he will spend two and a half days a week on BA business, one and a half days with Inchcape and one day a week at Siebe, where he will only take up the chairmanship once he has retired as CBI president.”The reality is I will spend whatever time is required on each interest You don’t always have to be in the office.

You can do an awful lot on the telephone or by e-mail.”Sir Colin also pointed out that since BA and Inchcape were international businesses, he could work often for the two companies at the same time during his frequent trips abroad.He is paid pounds 265,000 a year by BA, pounds 200,000 a year by Inchcape and pounds 65,000 a year by BT.Sir Colin said he was confident that he would not be overstretched. He pointed out that he had coped in the last three weeks despite the strike at BA, the crisis at BT sparked by the MCI profit warning and preparation required for the CBI’s announcement about its position on economic and monetary union.Comment, page 21. Bernard Arnualt, the head of the French LVMH luxury goods group, yesterday left no doubt that he was determined to scupper the pounds 23bn merger between Guinness and Grand Metropolitan, and was preparing the ground for a lengthy fight. The combative Frenchman rejected outright the olive branch offered to him just 24 hours earlier by John McGrath, the chief executive of GrandMet who hinted strongly that a compromise deal could be reached. According to Mr Arnault, who hosted a series of meetings with investors and analysts in London yesterday, the current merger plans between the two UK drinks groups were dead in the water. He was confident he could muster enough support from other institutional shareholders in GrandMet to veto the deal.

Mr Arnault plans a return visit to London next week to continue his crusade, by lobbying more investors .
He aims to force the UK drinks groups to accept his alternative plans to form a pounds 15bn wines and spirits business, comprising of Moet Hennessy, the spirits subsidiary of LVMH, the IDV business owned by GrandMet and the United Distillers arm of Guinness. Under this plan Pilsbury and Burger King, GrandMet’s food businesses, and brewing operations of Guinness, would be demerged.It emerged yesterday that Mr Arnault, who originally demanded a 35 per cent stake in a merged drinks business, would be willing to swap some of his Moet Hennessy assets and shareholdings in GrandMet and Guinness for a stake in the demerged food and brewing operations. This would leave him with a much lower proportion of the merged spirits groups. Analysts estimated that a deal on this basis could leave Mr Arnault with a stake of less than 25 per cent.In his first address since he launched his campaigning to stop Guinness and GrandMet in their tracks, Mr Arnualt said yesterday: “We believe we can get the support we need to block a deal.

What is important is the logic of our proposals compared to a big conglomerate combining companies that have no real synergy and logic.”There are things that are negotiable This [the 35 per cent stake] is open. What is not negotiable is a global structure incorporating four separate entities. I am convinced a creation of a drinks company brings a lot of value and that Moet Hennessy as part of it creates the best drinks company in the world.”Mr Arnault appeared to soften his position on the timing of a demerger, conceding it did not have to take place immediately.However, he in effect closed the door on any compromise with Guinness and GrandMet by accepting any agreement with the UK companies to spin off businesses at a later date could lead to insurmountable legal problems.And Mr Arnault showed his contempt of the management of Guinness and GrandMet by refusing to accept mere promises to demerge the businesses.”If we can complete an agreement today to demerge the businesses in one year, then I could live with. But it would have to be unconditional and our advice is that that is not possible. What are they want to spin it off why is is good to wait? If there is potential in these business now is the perfect time for shareholders to demerge them. What do they offer instead of the failure of their merger?”, he asked yesterdayMr Arnault remains determined to retain control of Moet Hennessy.