He was acutely concerned that inflation had risen above 3 per cent and was continuing to rise. "We've seen a dampening in growth of consumer demand since Christmas. Any increase in short-term interest rates would be likely to worsen that."John Roberts, chief executive at regional electricity company Manweb, urged against a hike, saying that worldwide rates look to be softening. We still need to go on rebuilding consumer confidence." He said there needed to be a recovery, though not a boom, in the housing market.Robert Brace, finance director of British Telecom, echoed the feelings of many who are already experiencing a marked slowdown. David Prosser, group chief executive of the insurance group Legal & General, comented: "I do not have much sympathy with Sir Brian's view.

If anything, I'd bring them down." He said demand was already so weak that Northern was unable to pass on raw material price increases. "Life is getting tougher again."Chris Haskins, chairman of Northern Foods, strongly resisted Sir Brian's reasoning: "Some people are taking the threat of inflation too seriously I would hold on, I wouldn't put them up. It would be a shattering blow to confidence in a very weak market." There had already been a slowdown in the Northern economy over the last two to three months, he argued. A straw poll of industrialists and financiers puts Sir Brian, who forcefully argued that the Government was not doing enough to curb inflation, in a minority of one. Sir Paul Nicholson, chairman of the Sunderland brewing group Vaux, said: "I do not think it would be right to put up interest rates. That implies a share price of pounds 15.50, compared with Friday's closing price of pounds 13.81, which values Thorn- EMI at pounds 5.9bn.But Viacom is unlikely to have a free run. Disney Corporation and US music mogul David Geffen are also said to be interested.. BUSINESS leaders this weekend gave the overwhelming thumbs down to Sir Brian Pitman, the Lloyds Bank chief executive who last week signalled strongly that the Government should lift interest rates.

BMG is controlled by Bertelsmann, Time Warner owns Warner, Sony is part of its Japanese parent, while Philips has 80 per cent of Polygram.EMI should fetch a high price, having turned in an average compound growth rate of over 30 per cent in the last five years.According to Kleinwort Benson, EMI is worth pounds 4.8bn, while the Thorn electrical retailing division may be worth pounds 1.9bn. The other four big hitters are tied up in larger media and entertainment groups. We reckon their market share of the North American market has fallen to 8 per cent from 12 per cent last year." He notes that Viacom's strong retailing presence in the US would also tie in with EMI's plans to expand the HMV music chain and Dillons bookshops.It is unlikely that EMI's attractions will be lost on Viacom, either EMI is the world's only free-standing record major. "Its main problem is the need to push volumes through other distribution channels. "We are looking at a number of options," the spokesman added.Analysts say the EMI record label, with labels ranging from Virgin and Chrysalis and big artists from the Beatles to Blur, would make an ideal fit for Viacom."A deal with EMI would certainly make sense if Viacom can leverage it," says a stockbroking source at Salomon Brothers in New York.In particular, access to Viacom's music and video stores, coupled with the MTV pop channel - the most powerful medium in the music world - would allow EMI to increase its share of the US record market, the largest in the world."EMI lacks critical mass in the US," says Greg Feehely, leisure analyst at Kleinwort Benson. But Frank Biondi, Viacom's chief executive officer, has made no secret of the fact that he is keen to enter the music business, either from scratch or through acquisition. But a series of asset disposals, including the sale of Madison Square Garden in New York for more than $1bn (pounds 625m), have helped transform the balance sheet, enabling Viacom once again to challenge Rupert Murdoch's News Corporation in the race to become the world's premier supplier of entertainment software.According to a Viacom spokesman in New York, the TCI deal reduces Viacom's net debt to $8bn (pounds 5bn), equivalent to 40 per cent of its current stock market capitalisation.The spokesman declined to comment on whether Viacom is interested in taking a minority stake in EMI or acquiring it outright.

The business is in effect up for grabs following Thorn's recent decision to seek a demerger of its rental division early next year. Last week, Viacom announced plans to slash its borrowings by $1.7bn (pounds 1.1bn) by spinning off its cable television operations to rival Tele-Communications Inc (TCI). Viacom, which owns the MTV music channel, incurred huge debts after buying the Paramount film studios and Blockbuster video stores. VIACOM, the US media and entertainment group, is emerging as a leading contender to bid for Thorn EMI's lucrative pounds 5bn music and retail division. Energis's TV ad campaign telling consumers about savings was a mistake."It's difficult to work out what their strategy is," he added..

"All the power is with BT and the cable operators, because they are in people's homes."Another City telecommunications analyst said: "Energis was a brilliant business plan for making use of the National Grid But margins are very thin in the long-distance market. They should have a cost advantage but they have obviously had a staff turnover problem."He said Energis had a chance of success but noted that the company had not made much progress in signing up large cable telephone operators to provide an alternative local connection to that offered by BT. It is not good to be the third entrant after the cream has been skimmed. The Grid in turn owns Energis, whose service is based on wires wound around the Grid's pylons and transmission network.