By Rob Arkwright, Hargreave Hale Ltd THE US Federal Reserve reduced interest rates this week for the 11th time this year but limited the cut to just a quarter-point.

The rates now stand at 1.75 per cent, the lowest level for 40 years.

However, the reduced cut of a quarter-point, instead of the recent half-point cuts, sent out signals that there are hopes of an earlier than expected end to the US downturn and that some confidence may be returning.

Over in the UK, headline inflation is also at a near 40-year low as it fell to 0.9 per cent in November.

The Bank of England's target rate is 2.5 per cent and analysts reckon this could lead to a further cut in interest rates.

Inflation has slumped following falling petrol prices and high street clothing prices. In the telecom sector, BT has appointed Ben Verwaayan, currently vice-chairman of US telecoms equipment maker Lucent Technologies, to replace Sir Peter Bonfield as chief executive. He will take over on February 1 and his joining salary will be £700,000. Suffering telecom company Marconi announced a partnership with BT to supply advanced interactive public terminals or "web phones".

This deal is expected to net Marconi £100 million in revenues over eight years.

Twenty-eight thousand terminals will be installed nationwide at existing and newly-created BT sites and is the largest ever roll-out of new generation web phones in the world.

It will give members of the public access to the Internet, e-mail and text messaging services as well as traditional telephone services. Marconi shares saw a good boost.

On the results front, Compass Group, the world's biggest contract caterer, revealed an excellent set of results, a year on after acquiring Granada's catering and restaurant business. Pre-tax profits leaped from £278 million to £583 million and turnover was up 51 per cent to £8.72 billion.