THE mergers and acquisitions market has always been a barometer used to gauge the general health of the wider economy.

When the recession set in last year, the deal flow dried up. There must have been a lot of thumb-twiddling inside the swish office blocks that corporate advisors tend to inhabit.

So Kraft’s bid for Cadbury is a welcome sign that there is light at the end of the tunnel.

With an initial bid coming in at a whopping £10bn, the deal has sparked a return of the sort of excitable writing that has long characterised financial news reports, a style of writing that has all but disappeared over the past 18 months. Now talk of “bidding wars” and “takeover battles” is back.

And if financial journalists are getting excited by the prospect of a juicy takeover, just think how corporate finance executives must be feeling. The idea that Cadbury’s share price may yet be bid up further will cause all manner of palpitations.

With the huge price- earnings ratios being talked about for a knock-out blow, there is clearly a supply of investment money lurking somewhere. Perhaps quantitative easing is working, with fresh supplies of government-injected funds replenishing what has been, until now, a pretty bare cupboard.

Given the drought of the past months, the aroma of freshly printed cash has to be positively therapeutic.

If Hershey and Nestlé join the fray, then the City and Wall Street’s wheeler dealers will be rubbing their hands with glee at the prospect of all the fees they could charge. But what does it mean for the rest of us?

There is, of course, the danger that this deal could fizzle out or that it will be a one-off. After all, one swallow doesn’t make a summer. But I suspect that the turn in economic conditions that we are hopefully about to witness will produce more such deals.

If large sums of investment cash are back in the market, then that’s got to be good for all of us. Businesses looking to expand is a better thing than businesses looking to cut back.

ROYAL Liver Assurance has struggled for many years to make a worthwhile surplus.

Recently-resigned chief executive Steve Burnett had spent the seven years since his appointment cutting costs, and appears to have made considerable progress, but it appears there is still much more to do before Royal Liver can deem itself on a secure footing.

As a result, it is now in the throes of axing scores of jobs from around its group operations.

The shake-up at the 159-year-old business has already led to the outsourcing of its IT functions, with 73 staff transferring to ATOS, a specialised provider of computer services.

The society has been at pains to emphasise it is a financial services business fit for the 21st century. Progress, its online provider of insurance and financial products, and Irish counterpart Caledonian Life, will form the core of Royal Liver’s operations.

But the future of Leeds-based financial advice arm Park Row and its Irish counterpart, Citadel, are currently under consideration. Indeed, redundancy notices have been issued to Park Row staff.

Perhaps the problem is one of scale. Maybe Royal Liver needs to tie-up with a similar mutual that can help it trade with a comfortable surplus. Maybe it’s time for Royal London to dust off plans shelved a few years ago for just such a merger.