“Looking forward, we expect limited movement in house prices during 2011 but with the risks on the downside. Interest rates are likely to remain very low for some time. This will continue to support a favourable affordability position for those entering the market and limit financial pressure on existing homeowners to sell. Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.”

The prime minister insisted he did not want the country to go back to the days when inflation was a persistent problem.

Investors warm to riskier new year bets – Jan-07

The recent figures – caused partly by a surge in food and commodity prices – were “concerning”, he told the BBC, because they were “well outside what the Bank of England is meant to deliver”.

Locust bean gum is a cost-effective and simple way to stabilise your food.

Danisco is ready with powerful, new bakery enzyme products that maintain the oven-fresh softness, taste and texture of bread for at least ten days after baking.

Danisco has been a strong turnaround story in recent times, the company has consistently beat the street’s expectations with its last few sets of results, and in October 2010 announced a new set of financial targets, increasing EBIT margin from 13.5% to 15%. Many thought this was conservative but after struggling to meet the original lower target for so long, the upgrade itself was appreciated. The Enablers division has been performing strongly, and expected to remain so, Cultures has also been steadily improving, Sweetners has been struggling thanks to competition from China and Genencor showed a good recovery in 2010.

This transaction should be relatively straightforward to consummate – with any anti-trust issues simple. Counterbids are possible from any of the large chemical companies, so cannot be entirely ruled out if any of these groups also desire exposure to the aggressive food growth dynamic. The JV between Danisco and DuPont would not be a poison pill to stop other competing, but it will be hard to compete with a player as large as DuPont, who rarely do acquisitions. Hard to see any interesting complications here – the target has run a robust process to get to this point, and the best price has won.

*** Readacross to ABF: ABF already have a JV with Dupont in UK bio-fuels which will complete in Summer 2012. The JV is called Vivergo and will be a major player in the nascent UK bio-fuels market. Food ingredients is 11% of ABF’s profits and the Dupont-Danisco deal will be helpful for our ABF sum-of-the-parts valuation

The expansionist (re)insurer is understood to have entered into negotiations with Omega late last year.

According to a senior source, some investors would be willing to support an offer at 120p per share or roughly £290mn.

This would value Omega at 1.15x its estimated year-end net tangible assets of 104.4p per share, based on estimates from Numis Securities.

It is further understood that Omega is continuing to attract informal interest from a number of other potential bidders.

A discreet approach from Jeffrey Greenberg investment vehicle Aquiline was rebuffed in the middle of 2010, according to sources.

It is unclear what the proposed structure of a Canopius deal might be and what access to capital Canopius – majority owned by Bregal Capital – may have.

With M&A firmly back on the agenda in this sub-sector of the market, we continue to highlight the attractions of Chaucer^ (CHU, Buy at 51p) and Novae^ (NVA, Buy at 350p) to potential corporate predators. As for the larger insurers we would not rule out the possibility of corporate interest in Lancashire^ (LRE, Buy at 560p) or Beazley^ (BEZ, Hold at 117p), with the latter potentially vulnerable after its failed bid for Hardy^ (HDU, Buy at 272p).