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Consumer prices in the US increased by only 0.1 per cent in January, taking the annual inflation rate down to 3.0 per cent from 3.3 per cent in December. The core inflation rate, excluding food and energy, declined to 2.5 per cent. Although the figures were much better than expected, just one component - air fares - accounted for the surprisingly low increase in core prices. The figures nevertheless confirmed that inflationary pressure remained muted. Separate figures showed a widening in the trade gap in December. The deficit on trade in goods and services was $10.3bn, up from $7.9bn in November.

Cable & Wireless's Mercury Communications subsidiary has won a pounds 48m contract to supply voice communications to Lloyds TSB Group. The five- year contract is for a managed service, delivering the corporate voice network linking the offices of Lloyds Bank and TSB Bank across the UK. The network will help Lloyds with the integration of its two banking groups following last year's takeover of TSB.

Grand Metropolitan has sold its Benelux-based bakery businesses, comprising Suzy, Desobry and Driehoek Holdings, to Compagnie Nationale a Portfeuille for pounds 8.5m, including debts. The businesses make waffles, biscuits and traditional Dutch cakes. Combined sales for these businesses for the year to September were around pounds 29m and operating profits pounds 100,000.