The society is also struggling to rectify payments to policyholders who left before the House of Lords ruled that its payout policy was illegal.Mr Treves also issued a strong warning to the Government not to whitewash the report into the demise of the society by Lord Penrose. The report is due to go to the Treasury in July and may contain evidence of regulatory failings that could lead to Government compensation.STANDARD LIFE’S OUTLOOK TURNS NEGATIVEStandard Life, the UK’s largest mutual insurer, which lost about £5bn on the stockmarket last year and was forced to use £1.5bn of future profits to help it meet its solvency requirements, was yesterday deemed to have a negative outlook by the credit ratings agency Standard & Poor’s.Standard lost its much-vaunted AAA rated crown from the ratings agency in January when fears that its capital resources had been greatly reduced caused S&P to drop the company’s credit-worthiness to AA.The negative outlook increases the chances of a further downgrade. Standard said it was “disappointed” by the decision.Analysts watching the Edinburgh-based insurer have growing concerns that the value of Standard’s assets is continuing to fall and its sales are slowing.S& P said Standard had suffered a “sharper decline in long-term savings and investments than its peers”.. The London stock market hit its highest level this year as a wave of optimism about a global economic recovery swept through world markets yesterday. The losers were defensive stocks, which fell as traders rushed to move into higher-risk bets.But strategists said it was a “technical” rally, and cast doubts on hopes of a concerted boom.

The oil price slipped below five-week highs that were achieved on Tuesday, falling 44 cents to $25.90 a barrel in London.. Retail group GUS, which controls Argos and the Burberry luxury goods brand, hinted it may spin off its Experian financial information division yesterday as it unveiled plans to seek a partial stock market flotation of its South African retail business. On Tuesday the group sold its home shopping catalogue division to Littlewoods for £590m. This followed December’s £900m acquisition of the Homebase DIY chain and the partial flotation of the Burberry luxury goods brand in July.Sir Victor Blank, GUS’s chairman, said: “Our priority since 2000 has been to focus on fewer businesses which operate in growth markets.”John Peace said he had an “open mind” on the shape GUS would take.

Of Experian, which would be valued at around £3.5bn, he said the business was “not fully understood” by the investment community. “We have to judge, over time, whether it makes sense to get the value from Experian by an IPO or other means,” he said. “But one thing we learned with Burberry is that it can be very distracting for the business.”Analysts welcomed the possibility of a demerger or float of Experian, which derives two thirds of its profits from North America. Nick Bubb at Evolution Beeson Gregory said: “Experian doesn’t fit, so in a year’s time it will be demerged. And thank God for that.”However, another analyst commented: “They are quite clear about looking at ways of crystallising value but Experian does still have some logic within the group due to the credit element within Homebase and Argos.”Mr Peace said Experian would remain part of GUS in the short term.

“We have no current plans to float off Experian,” he said.The South African retail business will be floated on the Johannesburg stock exchange in 2004. GUS, which will float around half the equity, said it would be worth £150m-£250m.The business includes 400 stores operating under the Lewis furniture and furnishings brand and 45 Best Electric outlets. The stores were bought in 1946 by former GUS chairman Isaac Wolfson. The division made operating profits of £31.8m on sales of £114m last year with much of the proceeds coming from the credit terms offered to customers.David Tyler, GUS’s finance director said the company was likely to sell all the equity in the business over the longer term and Nick Hawkins at Merrill Lynch said: “It may be small in a group context, but further disposals will be welcomed by investors, we believe.”The comments came as GUS reported a 16 per cent rise in underlying profits to £642m for the year, excluding the £139m profit from the sale of 22.5 per cent of Burberry and a £229m charge on the sale of the home shopping business.The Argos catalogue shopping business was again the star performer with profits jumping to £238m from £204m the year before.