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Is this it for Mervyn King? The Bank of England has announced an about-face, saying it will pump £10bn into the money markets to bring the three-month rate down. Looks like the Bank is now being run from Whitehall. Can the governor stay in these circumstances? Does he want to? Surely this is one U-turn too many (unless the governor knows something new that we don’t).

The FTSE 100 is up 2 per cent this morning thanks to the Fed’s rate cut. Interesting to see we have more than 1,600 responses to our poll – “Did the Fed do the right thing?” – and just over 70 per cent think not.

Northern Rock shares have suffered from rumours, picked up by FT Alphaville, that Lloyds TSB is prepared to offer only 200p a share and that HBOS is offering even less – 100p. Rock stock is off 8.5 per cent at 280p. Lots more to do here. I think, though, that what the rumour-mill has picked up is the price Lloyds was willing to offer last week, not a new price. There may be others interested in the Rock but Lloyds, I think, is unlikely to come back.

The Absolute Capital Management story just gets better. Yesterday co-founder Florian Homm walked out very acrimoniously. Today, the company said it had had requests for $100m of redemptions and had had to halt redemptions. It also said it had set up a review of the funds managed by Mr Homm, adding: “The preliminary results of this review indicate that seven of the eight Absolute Capital equity funds contain quoted investments which the board believes are not immediately realisable at their stated values due to their illiquid nature.” The shares, off more than 60 per cent yesterday, have halved again today.

Smiths Group and General Electric have called off their deal to put their detection businesses into a joint venture after a disagreement over strategy. The businesses make scanners to examine passengers’ baggage at airports but some shareholders had not been happy with the terms of the JV. Smiths shares are up more than 2 per cent this morning. Very embarrassing for the management.

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