"At 2.70, however, if sterling remains at current levels, the impact might be around 10 per cent of what profits might otherwise be this year," one analyst said.Redland is one of a clutch of building and construction companies to report next week, including Blue Circle, Caradon, Taylor Woodrow, Barratt, Amec and P&O.Encouraging signals over the housing market are likely to add weight to the Bank of England's calls for a rise in base rates to head off inflation and further fuel sterling's rise.. European investors are likely to shrug off a widely expected rise in US interest rates next week, when the Federal Reserve's policymakers meet, and drive share prices higher. Despite three recent warnings from Alan Greenspan, chairman of the Federal Reserve, that US stocks may be too expensive, fund managers believe shares will get a boost if rates rise by a quarter of a point to 5.5 per cent. They believe higher rates will renew faith in the Fed's commitment to clamp down on inflation and restart the stalled six-year rally on Wall Street, pulling Europe higher still.Even a larger-than-expected half percentage-point hike, they say, will ultimately be greeted by the market as positive. Any selloff that initially follows a rate increase is an opportunity to buy."Greenspan is always trying to stay ahead of the game," says Kathleen Dewandeleer, fund manager at Matheson Investment Management. "Even if the rise is a bit bigger than expected, markets may take it as a sign that he's still carefully monitoring things, and on we will go."European markets fell last week on the prospect of a rate increase.

In the UK, Thursday's sell-off was almost as dramatic as the one seen last December, when Mr Greenspan rattled global markets with his comments of "irrational exuberance" among investors.But Ms Dewandeleer says that canny investors have been preparing for a rate increase for months, adjusting portfolios to a less friendly interest- rate scene."You've had a declining interest-rate environment in Europe until now, and you played the banks and the utilities That is not the case anymore. Now you want the growth and restructuring stories.""It's a case of ducking and diving, bobbing and weaving," says Simon Smith, at stockbroker Albert E Sharp "There'll be a rise in the US, that's a given. The UK, more than any other market, is jittery in the run-up to the general election so a smart investor is going company by company. Your gains will depend precisely on where your exposure is.". Gerhard Cromme looks young for 53, speaks English and French fluently in addition to his native German, and smiles a lot He likes to think of himself as a very approachable boss.

However, the chief executive of the German steel and industrial giant Krupp Hoesch is a deeply unpopular man at the moment. Thousands of workers at rival steelmaker Thyssen believe he is the devil incarnate, the man who has come to steal their jobs and throw them on to Germany's unemployment scrapheap - now measured at 4.7 million, and counting. They have been taking advantage of his "approachability" with gusto: barracking him on his way to work at the undistinguished-looking Krupp headquarters in Essen, throwing eggs and fruit and mobilising political leaders to lobby him personally. To that end, they appear to have succeeded. Almost as soon as Mr Cromme announced Krupp's Dm13bn (pounds 5bn) hostile bid for Thyssen, its much larger steelmaking neighbour in Germany's industrial heartland, the Ruhr, last week he was forced to back down. The combined forces of federal economics minister Guenter Rexrodt and Johannes Rau, premier of North Rhein Westphalia, Germany's biggest state, bounced Germany's virtually sole corporate raider into "negotiations" with Thyssen.The fact that the Krupp boss has a Harvard Business School education behind him, plus his adherence to western business philosophies of cutting costs and glossing over "social responsibilities", has hardly endeared him to German workers and politicians alike, who dislike such ruthless Anglo-Saxon behaviour.With negotiations looking as though they might lead to a link-up of sorts, if not a full-blown merger, the politicians were beginning to see the wisdom of having a combined Krupp-Thyssen, whose capacity of 13 to 14 million tonnes of steel a year would almost equal that of British Steel, the European market leader and third largest steel producer in the world.Having initially voiced concern about the deal, Mr Rexrodt gave it qualified backing on Friday. "The goal must be to strengthen the competitiveness of the German steel industry and to secure jobs. Germany must keep its steel base," he said.Mr Cromme's actions symbolise the need to tread carefully in the slow rationalisation of German industry, and to get both the banks and the politicians onside first.