LONDON (ShareCast) - Footsie is expected to start with little change this morning with city sources predicting it will rise only 3 points in early deals.

Tour operators Tui Travel, Thomas Cook and German airline Lufthansa are in "early discussions" to merge Condor, Germanwings and TUIfly Germany.

"However, no commercial terms have been agreed. There is no certainty that any transaction will result and a further announcement will be made if and when appropriate," said both Tui and Thomas Cook in a brief statement.

Diageo sales were up from £9,917m to £10,643m but exchange rate movements hampered operating profits by £5m and pre-tax profits came in flat at £2,093m from £2,095m before.

The group said it believes it can deliver organic operating profit growth for the coming year within its range of 7% to 9%. "Together with the expected positive impact of exchange rate movements on reported results and our share buyback programme this means we expect to deliver double-digit reported eps growth," it added.

Poor weather and changes in the timing of sales hit first half revenue and earnings at miner Kazakhmys.Profit before tax slipped to $885.9m in the first six months of 2008 from $1,185.8m a year earlier, on revenues that increased to $2,837.8m from $2,789.3m.

In the press, Britain is set to endure an even deeper recession than is currently thought next year, with the economy shrinking for the first time since 1991, analysts at Capital Economics have warned, writes the Telegraph.

In a dire assessment that will fuel fears over the growing severity of the downturn gripping the nation, Capital Economics becomes the first significant forecaster to project that the slump will lead to a full-year drop in GDP over 2009, adds the Times.

The Government wants a deal between British Energy and EdF hammered out within the next two weeks, John Hutton said yesterday, as it emerged that the French utility was talking to the nuclear power generator over how to overcome shareholder opposition to its offer, writes the Telegraph.

Stephen Hester, chief executive of British Land, emerged as a candidate to succeed Sir Fred Goodwin at the helm of Royal Bank of Scotland, says the FT.

The Telegraph says Royal Bank of Scotland shareholders have demanded further boardroom changes after the appointment of three new non-executive directors to bolster governance at the bank

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