Even so, they believe, further rate increases are on the way, as the new chairman seeks to impose his authority.Peter Morici, the business professor at the University of Maryland, argues: “Ben Bernanke has yet to establish his credibility with financial markets as an inflation fighter. Should they start to fall, consumer borrowing and spending – largely financed by drawing on home equity – will decline This could place a significant brake on the economy. “This is a very strong survey,” Richard Iley, the senior economist at BNP Paribas, North America, said.On the other hand, the hugely important housing sector has stalled Across the US, home prices are levelling off. After growing by a feeble 1.6 per cent in the final 2005 quarter, GDP is set to expand by 4.5 per cent or more in first quarter of this year, with some signs that core inflation is gathering speed.Consumer confidence figures yesterday from the Conference Board were buoyant, as the closely watched index leapt to 107.2 in March from an upwardly revised 102.7 in February. “Some further policy firming may be needed,” as conditions dictated, the committee warned.The statement basically confirms what has long been known about Mr Bernanke, the former Princeton economics professor who took over from the legendary Alan Greenspan on 1 February: that he sees fighting inflation as a top priority – indeed, to the extent of having the Fed define a clear inflation target like that followed by the European Central Bank, and that for now, at least, the emphasis will be on “continuity”, building on Mr Greenspan’s 18 1ž2 year reign at the US central bank.But it also leaves scant doubt that the Fed’s benchmark short-term rate will rise to at least 5 per cent, and perhaps higher, in the months ahead, barring an unexpected and unlikely sharp downturn later in the year.Reflecting the mood, the Dow lost almost 100 points in the hour after the announcement.Mr Bernanke’s debut came at a delicately balanced moment for the economy, amid sharply conflicting signals about the future. Inflationary expectations “remain contained”, but rising energy costs and other factors could strengthen such pressures. According to the FOMC, growth “rebounded strongly in the current quarter” after the slackening at the end of 2005.

The overnight federal funds rate now stands at 4.75 per cent, compared with just 1 per cent in the summer of 2004 – the lowest level since the Eisenhower era in the late 1950s.
All attention, however, was focused on the finely calibrated wording of the statement from the rate-setting Federal Open Market Committee. Albeit widely expected, the 25 basis points increase, coupled with the rates warning, sent stocks skidding on Wall Street, boosted longer-term bond yields and strengthened the dollar. In its first policy-making session under Ben Bernanke, the Federal Reserve yesterday raised its key short-term rate for the 15th consecutive time and signalled that one or more further rises may be needed before the current 21-month tightening cycle comes to an end. People still want to browse.” He predicted a better second half, with new books by Michael Palin, Bill Bryson and possibly Dan Brown.. Supermarkets are never going to be specialist retailers and the internet does not have the service we offer. The company said it spent £2.1m during the bid talks on its advisers, Hawkpoint and Bridgewell.

It also incurred an impairment charge on its stores of £3.4m and stock write-downs of £1.3m.Mr Heneage said: “There is a structural shift towards supermarkets and the internet, but I think it will be finite. Some analysts think the bid is likely to be passed because the regulator has said it would take into account the impact of the internet on the books market.But if HMV decides to launch a new offer, it is expected to be lower than 440p a share, given Ottakar’s poor trading. Total sales rose 1.9 per cent to £176.5m.Mr Heneage offered to take the company private last year but was trumped by a £100m bid from Waterstone’s owner HMV. The 440p-a-share agreed takeover offer lapsed when it was referred to the Competition Commission, which is expected to publish preliminary findings this week A final ruling is due on 22 May.