And despite Zeneca’s announcement that its schizophrenia drug, Seroquel, had been approved, the company eased 16.5p to pounds 20.02p.Two drugs minnows did buck the sector’s downward trend, though. And despite a bearish note from Societe Generale, Rolls-Royce edged up 1p to 237p.The biggest Footsie loser by far was British Airways, which plummeted by 30p to 610p after the company revealed that strikes by cabin crew would cost pounds 125m in the first half of the year.Pharmaceuticals, which have been up and down like a yo-yo in recent weeks, were back in the doldrums again after negative press comment over the weekend. ICI firmed 5p to pounds 10.20 on reports that a $400m joint venture in Shanghai had been approved. Abbey National also closed 15p poorer at 834.5p, after a feeling in the market that its results last week had not matched up to those of Lloyds and HSBC.

Declines in banking stocks in the US and Europe had also unnerved the financial sector, analysts said.Among other blue chips, Bass added 8p to 842.5p despite JD Wetherspoon’s decision to ban alcopops. NatWest – which reports results today – climbed 10.5p to 870, and Standard Chartered improved 8.5p to close at pounds 10.01.But investors seemed to be heeding analysts’ warnings that banks could be in line for a sharp correction, as others in the sector were not looking so flush.Bank of Scotland was among the top Footsie fallers, shedding 15p to 430p. Analysts also pointed out that all other recent indicators of consumer spending had indicated booming demand. Yesterday’s figures were not enough to change the minds of the Bank’s experts if they wanted to raise interest rates.. The naming of the first members of Gordon Brown’s new Council of Economic Advisers should not distract attention from the fact that the most influential adviser in the Treasury, and the chief architect in the construction of post-Tory Britain’s economic policy, is a 30-year- old who, so far in his brief career, has been a student and a Financial Times leader writer. The remarkable influence of Ed Balls stems from the fact that he has imported from America a radically different intellectual current.

Mr Balls deserves much of the credit for making over the party’s economics in New Labour clothes.
New Labour is not very interested in macroeconomic policy – choosing the right level of government borrowing and interest rates. When the Chancellor says the Government will be responsible about borrowing levels and the inflation target, he means it. The new economics is orthodox about these issues, preferring to tackle the interesting problems where governments can probably achieve something.This means looking at policies concerned with the “supply side” of the economy – its wealth-creating potential – such as taxes on capital, training, welfare benefits and the structure of the jobs market.The young Ed’s intellectual conversion took place at Harvard six years ago. The child of an academic biologist, his early education at Nottingham High School was followed by a degree in Philosophy, Politics and Economics at Keble College, Oxford. He then went on to win a Kennedy Scholarship to study for two years at Harvard University.Harvard has a strong claim to be the world’s most elitist academy, as well as one of its best. And one of the priciest too – its fees are up to $30,000 (pounds 18,000) a year.

Despite the cost, though, it does not quite achieve the same social exclusiveness as Oxford But it caps even Oxbridge for intellectual arrogance. The assumption that Harvard students are superior is added to the food in the canteens, delivered with the lectures and proven in the job market.Students are lectured by people who have reached the top of their professional tree, and the best – like Ed Balls – can work closely with academic superstars. In his case it was Lawrence Summers, a 42-year old economist who is now a senior Clinton administration official.Academics hold Mr Balls in very high regard, and his intellectual credibility has helped the Chancellor. But some see a catch with the new approach in its vulnerability to fashions, to any new twist that seems to make economic theory fit the latest data better.One of Larry Summers’s senior Harvard colleagues finds the whole approach gimmicky. He says: “You can be too clever by half with this method.”It is a view that is shared by some commentators in this country. Giving his assessment of the Government’s first 100 days, Simon Briscoe, head of research at investment bank Nikko Europe, says: “There has been a focus on good PR at the expense of well thought-out policies.”He finds Labour’s economics long on rhetoric and short on action, adding: “We must hope that the Government does not fall for its own rhetoric.”One casualty of the Treasury team’s emphasis on the presentation of policies, in which Mr Balls is helped by Gordon Brown’s spin-doctor, Charlie Whelan, is civil servant Jill Rutter, the former head of the press office.