The economy is set to slow more than expected next year as higher interest rates and financial market turmoil take their toll on growth, the west's leading thinktank said today. By Angela Balakrishnan.

  The number of mortgages approved in the UK saw a hefty annual fall last month, the lowest August level in seven years. By Angela Balakrishnan.

  Shares in Northern Rock rose sharply after a report that it had opened its books to veteran banker Chris Flowers and the US private equity firm Cerberus. By Julia Kollewe.

  Shares surge nearly 40% as the embattled photographic chain Jessops says it has parted ways with its chief executive, Chris Langley. By Julia Kollewe.

  BMW is to build a new type of Mini and a smaller, cheaper Rolls-Royce in Britain under ambitious plans set out today to restore investor confidence and attract younger customers. By David Gow.

  Closing market report: A continued revival in the mortgage banks helped lift the FTSE 100 nearly 1% today. By Nick Fletcher.

  British Airways underlined the importance of the Asian market to its growth prospects by making a £4.1bn order for 12 A380 superjumbos that it said were suited to destinations such as Hong Kong, Singapore and India. By Graeme Wearden and Dan Milmo.

  Sir Richard Branson has signalled that Virgin Media has not abandoned its plans to buy ITV. By Tara Conlan and Katie Allen.

  The British cinema industry is celebrating its best summer in 40 years, partly thanks to the awful weather. By Graeme Wearden.

  PM says abuses will be tackled in the pre-budget report due to be published next month on the same day as the comprehensive spending review.

  Mitchells &Butlers, owner of the Harvester, O'Neill's and All Bar One pub chains, has been boosted by the introduction of the smoking ban this summer. By Julia Kollewe.

  The former CBI chief is still lobbying for business but now on a global stage.

  Nils Pratley: Philip Bowman has joined the Smiths Group, which has already sold its large aerospace division. What could it mean? A full break-up of the 150-year old engineering group, said the instant chorus across the City yesterday.

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