Chartered Institute of Purchasing Supply index for U.K. service industries rose to a forecast beating 52.4 in December from a 4-year low of 51.9 in November. Economists had forecasted a decline to 51.6.

Also the index of business expectations at U.K. services companies declined to 67.5 in December from 69.6 in November.

The Financial Times newspaper reported today that Chancellor of the Exchequer Alistair Darling said the U.K. Treasury will propose legislation in May to allow the Financial Services Authority to question banks about their day-to-day transactions and empower the Bank of England to be more efficient in its surveillance systems.

Darling added that the Government will not make any major change to the “tripartite system” of regulation through which authority is shared by the Treasury, the Central Bank and the Financial Services Agency.

Of the 102 FTSE index shares, Carphone Warehouse led the advancers with a rise of 2.6% followed by gains in Reed Elsevier of 0.4%, in Smiths Group of 0.2%, and in Reuters Group of 0.08%.

Carphone Warehouse rose on lingering speculation the handset retailer might be approached from Vodafone Group Plc or the American retailer Best Buy.

Liberty International Plc led falling stocks with a drop of 6.9% followed by losses in Kingfisher of 6.8%, in London Stock Exchange of 6.3%, in Next Plc of 5.7%, and Enterprise Inns of 5.6%.

Next also fell after Bear Stearns downgraded the stock to “underperform”.

Other retails fell as well on the Grant Thornton report. Wolseley Plc plunged 4.85% and Marks & Spencer slumped 4.52%.

Cairn Energy Plc tumbled reporting the oil producer said it had failed to find gas at the Magnama-1 exploration well in Bangladesh, adding that the company plans to plug the well. The stock closed down 2.41%.

Vedanta Resources tumbled from earlier gains that were spurred by Financial Times reports Chinese firm Biosteel might make a bid on the companies’ operations in India and Zambia. The stock declined 1.34%.

Nester Healthcare Group gained after it said it had received preliminary takeover approaches.


1:00PM New York—U.S car sales fall in December, Toyota replaces Ford as number two U.S. auto seller.

U.S car sales were stuck in low gear in December, as Toyota Motor Corp reported its 12 straight year gain and eclipsed Ford Motor Co to number two positions by auto sales in 2007. General Motors still leads the U.S. auto sales.

Monthly sales of cars and light trucks dropped 4.4% at GM, and were down 6% on the year. Toyota sales declined 1.7% while sales at Ford dropped 9.2%. Ford lost its number two position that it held for 77 years. For the year Toyota sales increased 3.1% and sales at Nissan rose 4.8%.

Chrysler LLC, meanwhile, reported an annual sales decline of 3.1% although December sales were fractionally up 0.5%.

At Nissan Motor Co, monthly sales dropped 2.4%, as Honda reported a gain of just 14 vehicles in the month helped largely by sales of its Accord and Civic brands. Honda said sales grew 2.8% in 2007.

Overall, in 2007, U.S auto sales declined 2.5% to 16.1 million including trucks and cars.

Despite growing concerns about fuel economy, car sales fell only 2.6%, and truck sales fell 2.3% in the year.