LONDON (ShareCast) - Gains have disappeared in London following early losses on Wall Street and a drop at Thomson Reuters after revenue growth slowed during the second quarter.

The financial information provider reported an 11% rise in revenue for the quarter to $3.4bn, but that was less than the 12% increase enjoyed during the previous three-month period.

ITV still leads the risers though, helped by continued bid talk. InterContinental Hotels is also up, helped by a 29% rise in first-half operating profits to $284m, in line with forecasts.

But retailers are under pressure after retail sales fell again in July, making it four down months out of five now, with “frivolous shopping off the agenda”, according to the British Retail Consortium.

Things could get worse, warned the BRC, as like for like sales dropped 0.9% last month, while total sales were up just 1.7% against last July, one of the worst performing months of 2007. M&S, Next and Kingfisher are all lower.

A separate report revealed that inflation is now more than double the government’s 2% target after soaring to 4.4% last month on further increases in the cost of food and high fuel prices.

The Consumer Price Index jumped from 3.8% in June and trumped market expectations of a rise to 4.2%. It’s the highest inflation figure since the Office for National Statistics began compiling figures 11 years ago.

In the FTSE 250, housebuilders started well following strong gains yesterday but are now marginally ahead. Barratt, is one of the gainers helped by stake-building by US firm Polaris.

The experience of the US does not bode well for the UK newspaper sector, JP Morgan said as it lowered its rating on Trinity Mirror to ‘underweight’ from ‘neutral’. The Mirror publisher is also among the heaviest fallers.

UBS has lowered its rating on Old Mutual to ‘neutral’ from ‘buy’ and cut its target price to 108p from 132p, following the South Africa-exposed insurance company’s interim results last week.

Merrill Lynch predicts a worsening trading environment for Speedy Hire over the next couple of years and downgrades its rating on the tool hire specialist to ‘neutral’ from ‘buy’.

Grainger has given the sector a lift with a trading statement. Trading reamns tricky it said, but it is still achieving sales of its residential properties.

Elsewhere, Tesco has announced plans develop a wholesale cash-and-carry business in India, with an initial investment of up to £60m in the first two years. The new wholesale outlets will be designed for the Indian market following local research. Tesco is also entering into an exclusive franchise agreement with Trent, the retail arm of the Tata Group.

Broker and bid target Collins Stewart's profits slumped by 82% in the first half to £9.6m from £52m. "Market conditions are obviously challenging and have adversely affected the Capital Markets division, " chairman Terry Smith said. The interim dividend falls to 1.3p from 2.5p.

Glasgow based engineer Weir delivered an 85% rise in half year pre-tax profit and is confident of achieving further growth for the full year.

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