IT CAN’T come as too much of a surprise to find that two credit rating agencies have downgraded Matalan’s creditworthiness.

The discount segment of the retail market is bound to be struggling in the current slow economic conditions. Customers, particularly those working in the public sector, are bound to be minding the pennies more than in the past.

Nor is it just Matalan that has been affected by the lean market. Even the likes of the once unstoppable Primark have found that consumers are being more tight-fisted.

The concern is that price pressures mean that underlying profitability has been hit, thereby impairing the retailer’s ability to make interest payments.

It’s no coincidence that Matalan is seeking to refinance its borrowings, trying in effect to spread its payments. In a way, Moody’s and S&P’s downgrading amounts to a vote in favour of the refinancing, which they deem to be on much more manageable terms than the current borrowing arrangements.

Irrespective of its current financing issues, you would have to worry about Matalan’s long- term prospects. Ten years ago, it was going from strength to strength, but then it seemed to lose its way in the market. Ever since, it has struggled to make a worthwhile return on sale. Competition in the discount retail sector is very fierce, as many players seek to extract a margin from the least profitable segment of the market.

WITH China raising interest rates and oil prices reaching $122 a barrel yesterday, the news from the world economy is unsettling.

The sense of foreboding was further compounded by the publication of an OECD report that pares back its previous forecasts for UK economic growth.

In a survey of the G7 economies, the OECD estimated that UK gross domestic product would expand at an annualised rate of 1% in the second quarter. This compared with an OECD forecast in November of 1.3%.

In contrast, the US economy is expected to expand by 3.4%, France by 2.8% and Germany by 2.3%.

More bad news came this week in the form of a survey from the British Chambers of Commerce suggesting economic growth would be slow.

Yet I can’t help feeling that all the doom and gloom is misplaced.

Economies always move in cycles and a return to strong growth both here and abroad will follow the recent tough recession like night follows day. The only question is when. Will it be in time to make a difference to the hundreds of thousands of people in Britain losing their jobs as public sector cuts start to bite?

PROFESSOR Dennis Kehoe, chief executive of AIMES Grid Services, has previously aired the view that Liverpool was a “digital desert”.

However, that appears to be changing now, with the news that AIMES is to be at the centre of a new digital exchange to be based at Liverpool Innovation Park.

New switching equipment will be linked to fibre cable already in the ground and a transatlantic cable.

It will give Liverpool businesses access to very high speed broadband services at a fraction of the cost of the currently much slower service.

It will help Liverpool catch up with Manchester and London and to stride ahead of the rest of the country when it comes to attracting businesses and investment.

However, it’s an advantage that will only be temporary as it is inevitable other places will make similar investments.

So let’s make sure we make the most of it.