Palmer Capital will provide about £90m in cash and Somerfield will manage the sites.. MFI, the furniture group, warned yesterday its operating costs would soar by £47m this year as its core retail chain sunk to a £46m loss. It is likely to seek further talks with Somerfield's board.It is the second time in less than two years that Somerfield has spurned a takeover approach. National Express disclosed yesterday that it has a £350m warchest to spend on takeovers and further expansion of its existing train, bus and coach businesses as it announced forecast-busting annual results driven by rail passenger growth. Unveiling a 17 per cent rise in pre-tax profits to £63m for 2004, the group also announced plans to reward investors with a £100m share buyback and an 18 per cent in the final dividend.Profits from National Express's eight rail franchises, which operate nearly a third of the country's trains, increased by 76 per cent to £58.5m. "Just looking at fundamentals - inventories, supply, demand and the worldwide desire for a stable oil market - I believe it will be in this band," he told CNBC television.US distillate inventories, which includes heating oil, fell 700,000 barrels to 111.8 million barrels last week, the Energy Information Administration said..

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Oil prices broke through a key level yesterday, reaching $52 a barrel as Saudi Arabia, the world's largest exporter, forecast they would stay above $40 for the rest of the year. Traders brushed aside better-than-expected US inventory data to drive prices in New York up 88 cents to $52.05 In London, Brent crude gained $1.17 to $49.68.

Prices have surged about $6 in the past two weeks in response to strong demand, fears of a cut in production by the cartel Opec, and the cold weather snap across Europe and the United States.The rise has been fuelled by the fall in the dollar that enables non-US countries and companies to raise their demand.Opec has attempted to cool the market by hinting that it is unlikely to reduce production quotas when the 11-nation group meets in Iran next month.Ali al-Naimi, Saudi Arabia's oil minister, said yesterday he believed crude prices were likely to stay between $40 and $50 throughout the year. Yesterday Rachel Lomax, a deputy governor of the Bank, became the latest member of its Monetary Policy Committee to reveal worries about rising inflation, saying the Bank might have to take "pre-emptive action"."We think there is very little slack in the economy," she told an audience of business leaders in Liverpool "The labour market is certainly tight. But the growth in labour costs has been surprisingly muted and some cost pressures have been absorbed by lower profit margins How long can this last?". "It seems most unlikely that the recent upturn in settlements will be sustained," she said.However the survey is likely to ring alarm bells at the Bank of England. Its survey, which covered 114 firms employing 130,000 people, found pay was driven up by deals at private sector services firms.The report is the latest to point to a marked rise in pay deals after the surge in headline inflation from 2.5 per cent a year ago to a six-year high of 3.5 per cent in December.Sheila Attwood, the editor of IRS Pay and Benefits, said an expected fall in inflation should prevent further surges in earnings growth this year.Headline inflation fell last month to 3.2 per cent and IRS expects it to hit 2.6 per cent by the end of the year. The level of pay deals struck in the key bargaining month of January has surged to a six-year high, according to the latest report to highlight mounting inflationary pressures. The average basic pay award between November and January jumped to 3.3 per cent, the highest since December 1998 and ending a record 22 months of stability at about 3.0 per cent, Incomes Data Services said.The pay analysis firm said more than six out of 10 pay settlements were higher than those agreed in the same quarter a year earlier.

It is also looking at other sites for supercasinos in Birmingham and Brighton.Pre-tax profits at the group rose 41 per cent to £383m.. Peter Mandelson fired a warning shot across China's bows yesterday, saying the world's fastest growing economy needed to take action to avoid causing "trade frictions". As a general election draws near, there have been fears that the Bill will fail.The Hilton Group hopes to benefit from the Bill's casino proposals. It wants to win one of the eight new supercasino licences that the Gambling Bill will allow."We have put in a serious bid for Blackpool because we think we have two strong brands, Hilton and Ladbrokes, that could make the development work," he said.