But yesterday’s defeat is a further sign of Congressional unease at the runaway federal deficit, now forecast at a record $400bn or more for fiscal 2003.The Senate defeat tempered gains on Wall Street yesterday. The Dow Jones index, which jumped 123 points in afternoon trade amid reports of an uprising in Basra, reined in its advance to end at 8280.2, up 65.6 points.Stock markets had fallen earlier in the day after it emerged that confidence among American consumers fell this month to a 10-year low. It was the fourth successive monthly drop.But analysts noted that the cut-off date for the survey was 18 March, the day before the US began its attack on Iraq. Alan Ruskin at 4CAST said: “Future developments in confidence will clearly depend on future developments in Iraq, which few can now confidently predict.”Meanwhile, financial regulators from the Group of Seven nations yesterday pledged to intervene to boost world economic growth if the end of the war failed to spur a rebound. The Financial Stability Forum’s promise – a veiled reference to further cuts in interest rates and taxes – will be seen as an attempt to reassure the increasingly volatile markets.Andrew Crockett, the FSF chairman, said the Iraq conflict was one of the largest threats to arecovery. “Nevertheless, the central scenario remains that once uncertainties are removed, there will be a gradual pick-up in economic activity,” he said.. Its 12-year relationship with BT was extended only yesterday for a further seven years, with Compass agreeing to run all BT’s staff canteens and vending machines across all its offices in the UK.

This is because the group is yet to muster the cashflows and returns on investment that you might expect from a world leading company in a sector so well insulated from economic vicissitudes. A trading update yesterday gave some comfort that it has been able to improve profitability as promised, though. While it is true that most of the margin gains have come in the UK, where it is still squeezing cost savings from the merger with Granada in 2000, there are more modest improvements in all regions.Sales growth is also still impressive – 6 per cent overall in the first six months of the financial year, with the best performance in the US, where the outsourcing of food services is not so well developed.There is plenty of growth to go for because, although Compass is the biggest group of its kind in the world, it still has a market share of just 4 per cent. Buy.Crumbs of comfort from Northern FoodsThe price of chocolate digestives is going up. Or, as Northern Foods snappily put it yesterday, “whilst biscuit trading remains difficult, the price increases necessary to recover the significant rises in chocolate input costs are being implemented”.

Or, as long-suffering investors might say, thank Fox’s.Northern Foods’ Fox’s biscuits business – which is celebrating its 150th anniversary this year – has been struggling with the twin devils of tougher competition (McVitie’s stepped up the special offers) and higher raw materials prices (cocoa in particular). Although the biscuit business accounts for just over 10 per cent of Northern Foods’ turnover, it was the main reason for a nasty profits warning in January. There was some relief that the group was able to report most chocolate snack producers are now passing on the higher costs. But investor sentiment will take a while yet to recover.Tough competition and higher raw materials prices are not new in the food sector, of course.