Outlook: Mothercare beware: Philip has made Terry green with envy

Working with Philip Green clearly brings out the entrepreneur in a man. And given how much money the great toga party-thrower has made for himself over the last few years, is it any wonder?

Barely 18 months into working with the high street wheeler dealer at Bhs and up pops his namesake Terry Green with a bid for the group himself. The former Debenhams chief executive, lured by Philip to run Bhs as part of the original £200m buy-out from Storehouse two years ago, decided he liked the business so much he wanted to own it. Unfortunately Philip turned down the first offer worth £600m and the second, worth £800m, was never formally delivered after Philip said he was still not interested in selling.

After those two setbacks, and with Philip now sitting on a business worth £1bn, it is little wonder Terry has decided it is better to be the owner-driver than the hired hand. So he's off scouring the high street for opportunities. He has already decided against buying Rubicon, the former Arcadia division which includes Warehouse and Hawkshead. The question is where he might pitch up next.

One business he has been linked with is Mothercare. There would be a neat symmetry here as Mothercare is basically the rump of the old Storehouse empire left behind after Philip snapped up Bhs. Having delivered three profits warnings in the past nine months, it is no surprise that today's results are expected to be accompanied by an announcement that Alan Smith will be stepping down as chairman.

Terry might, therefore, be tempted to take a pot at Mothercare. The problem is that after a runaway consumer boom this looks like a better time to be selling retail businesses than buying them. Which makes you wonder why Philip is hanging on to Bhs.

Rate case

The Monetary Policy Committee may have voted 9-0 to keep interest rates on hold at its last meeting but the decision was closer than the scoreline suggests. A clear split has emerged on the committee between those who are beginning to feel that an immediate increase may be justified and those who believe rates should be kept where they are until the picture becomes clearer.

The split is not necessarily between the Bank of England members on the committee and the outside members. Although one of the deputy governors, Mervyn King, is a hawk and the Bank's last inflation report made a strong argument for why rates should rise, the other deputy governor, David Clementi, sees no necessity for an increase to cool down the overheating housing market.

Nevertheless, what the latest minutes do tell us is that a rate rise is now firmly back on agenda as far as some MPC members are concerned, suggesting that the outcome of next month's meeting will be a closer call. At the last meeting, one group of members argued that the inflation report alone justified an immediate increase in rates on the grounds that the 2.5 target rate will be exceeded by some margin in two years. If correct, this begs the question of why the Bank is ignoring its own analysis.

One explanation may be that some members simply do not accept the Bank's calculations. After all, much of the evidence points to a remarkably benign outlook for inflation. Another is that there are sufficient doubts about the economic recovery and the level of consumer confidence to justify holding off.

A rate rise in June looks unlikely, if only because Marion Bell, who is replacing the leading dove on the MPC, Sushil Wadhwani, does not arrive until July, leaving the committee one short. But August looks a better bet. In the meantime if in doubt, do nowt looks as good a maxim as any.

Nats lesson for rail

The fiasco over National Air Traffic Services does not bode well for the experiment Stephen Byers is conducting with the railways. Like Nats, the new company being created to replace Railtrack, Network Rail, will be a public-private partnership representing various interest groups including the train operators. And, like Nats, it will be constituted as a not-for-profit organisation.

If Nats is any guide this model looks seriously flawed. British Airways, Virgin Atlantic and the other carriers which make up the Airline Group vastly overpaid for Nats in order to keep the other bidder, Serco, at bay. Not only that, the complicated ownership structure, with seven airlines owning 46 per cent of the business and the rest split between the Government and employees, has been a recipe for management disarray.

Since the part-privatisation of Nats, the service has been hit by a downturn in air travel and a consequent reduction in revenues. There has also been a well-publicised series of computer cock-ups at its old air traffic control centre at West Drayton and the new one at Swanick.

The response of the Nats management was to ask permission to charge its airline customers more. The regulator, the Civil Aviation Authority, has sensibly rejected this request on the grounds that the whole purpose of the Nats PPP was to transfer risk to the private sector. This means that Nats will have to be bailed out by a combination of the Government, its banks and a new private sector partner, most probably the airports operator BAA.

Herein lies the silver lining to the cloud. Bringing BAA into the consortium would provide a logical bridgehead between the company which operates the UK's main airports and the one which controls its airspace. While the CAA would be uncomfortable at the prospect of BAA taking too large a stake in Nats, its presence would produce more joined up management of the UK aviation industry. After all his travails on the railways, Mr Byers might just learn a lesson or two from this.

Holiday hell

The Holiday season has not properly arrived until MyTravel (Airtours as was) pops up with a profit warning. In 2000 it was the inability of its German subsidiary to get towels on the beach quickly enough. Last year it was the aftermath of 11 September. The latest reason for kicking sand in investors' eyes is the disappointing level of family bookings which has left the management a million holidays still to sell this summer.

It seems like only three months ago that MyTravel was reassuring us that the pick-up in bookings this year would be enough to offset the collapse in business last autumn. In fact it was only three months ago. Alas, forward bookings have crumbed again since Easter, for reasons MyTravel finds hard to explain, forcing the company to discount more holidays than it had planned. In these circumstances, the decision to launch a no-frills airline looks like a distraction management could do without.

Certainly for Airtours' founder, David Crossland, who sails into the sunset this November, a third profit warning in as many years is not the swansong he was looking for.

m.harrison@independent.co.uk