Terry Murden: Business pays a high price as looters carry off hard-won profits

ALREADY the first effects of the riots are being felt by businesses that caught the full force of the violence. Greggs was preparing to unveil its first-half results while television pictures of its blazing store in Peckham, London, were being beamed across the world.

Chief executive Ken McMeikan told analysts that the affected outlets – two badly damaged and 28 forced to close – were only a small part of the group. But this won't help on top of reduced footfall and the rising cost of ingredients.

Probably the most high-profile victim was JD Sports, targeted by looters stealing trainers – part of the hoodie uniform. Peter Cowgill, executive chairman, said he felt physically sick, particularly as some of the thieves had the temerity to stop to try on the shoes and then put them in JD carrier bags on their way out. The rioting could cost JD, one of the successes on the high street, 10m in profits.

While this has been the worst case of civil unrest in a generation, no one should pretend that businesses and members of the public are not subject to mindless vandalism and theft day in, day out.

The riots may have been contained to England, but Alex Salmond is deluded if he thinks the yob culture that breeds them is not a problem north of the Border. "We know we have a different society in Scotland," the First Minister ludicrously stated yesterday. You only have to read a local paper to see the mayhem that goes on in communities around the country.

Salmond should have stepped outside the chamber on one of several nights earlier this summer when a gang tore through Holyrood throwing boulders and scaffolding bolts at cars and windows, attempting to destroy security gates at a building site and spreading fear among local traders, residents and tourists. All this literally a stone's throw from the parliament. The police were called each time to deal with these "mini riots", but didn't turn up as they were dealing with other incidents. Heaven help Edinburgh if there is a repeat of what has been happening in England.

Tricky balancing act as central banks fight scourge of inflation

AS IF Britain is not feeling battered enough, Sir Mervyn King made it clear yesterday that the economy will continue to be torn apart by external pricing pressures and low domestic growth.

Presenting the Bank of England's latest inflation report, the Governor was in no mood for pretending that the outlook remains any better than grim, though it didn't stop his detractors from claiming that despite the gloomy prognosis he was being too optimistic.

Critics say that the Bank's revised forecast of 1.4 per cent growth this year is still too high, so too its predictions for growth in 2012. King's assertion that there will be no double-dip recession divides opinion, particularly with the US teetering on the brink of its own slowdown.

But there is broader agreement on the outlook for inflation with few now disagreeing that it will hit 5 per cent before tailing away next year. This is giving King and his fellow members on the Bank's monetary policy committee good reason for holding the interest rate at 0.5 per cent, firm in their belief that raising it would not be effective in combating inflation at this time as too many external factors come into play, namely rising commodity prices over which the Bank has no control. This has been argued here since talk of a rate rise gathered momentum at the turn of the year. Raising the base rate would also add to the cost of living through higher mortgage costs and so on, and ultimately act as a drag on recovery.

The Bank's new target for growth is more in line with, but still ahead of the 1.3 per cent predicted by the CBI and comes after a quarter that has seen the US slip dangerously close to another downturn and the eurozone flirt with implosion.

What is of growing concern is the rapid deterioration in prospects from just three months ago. The economic growth forecast at that time was already a miserly 1.8 per cent and there was talk of the need for interest rates to rise in August. A rise now looks off the table until at least well into next year. It is clear, however, that central banks are preparing to take further action where necessary. Interest rate rises may be off the agenda in Britain and the US, but the European Central Bank has been more willing to raise rates to combat inflation.

Despite opposition from Germany's Bundesbank, the ECB has been buying bonds after the G7 group of finance ministers agreed to take all measures necessary to ensure financial stability.

The US Federal Reserve said on Tuesday that it would consider further steps to help growth, taken as a sign of more quantitative easing, a move that could be replicated in the UK.

The UK and US decisions to keep interest rates on hold has somewhat compromised the ECB's policy of aggressively fighting inflation with rate rises as a further rise would have implications for the euro.