Britain’s finance minister Alistair Darling will set up a new group comprising City of London bankers to examine short-selling of shares in companies undertaking rights issues.

The economy will slow to its weakest growth rate in almost two decades next year, hit by rising oil and food prices and by feeble consumer demand, the country’s leading employers’ group said.

* U.S. stocks rally as tame CPI calms inflation

* Nikkei up 2.6 pct, exporters rise on weaker yen

* Asia stocks rally as oil falls below $134

* Dlr near 4-mth high vs yen, sheds post-G8 loss

* NYMEX crude falls $1; Saudi prepares output boost

* Gold creeps higher on investor buying, dollar

UK stocks to watch on Monday are:

BARCLAYS The bank is close to raising 4 billion pounds from sovereign wealth funds to boost its capital in a deal that will be completed in the next two weeks, the Sunday Times said.

Separately, Barclays’ Chairman Marcus Agius said the global subprime crisis has yet to run its course amid concerns that big lenders will unveil more credit-related losses in coming weeks.

RIO TINTO , BHP BILLITON The miner can exploit China’s booming demand for resources on its own and does not need a merger with rival BHP Billiton, Rio Chief Executive Tom Albanese said on Monday.

Albanese also said Rio’s major new iron-ore project was still on track.

LLOYDS TSB Lloyds TSB is in early stages of considering a takeover bid for Germany’s Deutsche Postbank , the Sunday Telegraph said.

BARRAT DEVELOPMENTS , TAYLOR WIMPEY A group of Britain’s biggest institutional investors are working on plans drawn up by bankers at UBS to provide direct funding to shore up the housebuilding sector, the Sunday Telegraph said.

The report said bankers at UBS had drawn up possible plans for a wide-ranging placing by major shareholders in companies such as Taylor Wimpey and Barratt Developments.

HBOS HBOS was under pressure to provide more details about exposure to struggling housebuilders after a company that formed one of bank’s big investments called in restructuring experts, the Times said.

BRITISH ENERGY EDF has made its final takeover offer for British Energy and if its nearly seven pound-a-share offer is rejected it will walk away, the Mail on Sunday quoted sources close to the deal as saying.

Meanwhile, the Daily Telegraph said the 11 billion pound auction of British Energy could be abandoned in favour of a series of joint ventures with Europe’s leading power companies, according to plans being considered by the UK nuclear operator.

ROYAL DUTCH SHELL Royal Dutch Shell and ExxonMobil are close to completing a 2 billion pound sale of their Infineum performance fuel joint venture, the Times said.

ROYAL BANK OF SCOTLAND Institutional investors in the Royal Bank of Scotland have approached Philip Hampton, chairman of British supermarket group J. Sainsbury , about becoming chairman of the bank, the Sunday Telegraph said.

GLAXOSMITHKLINE The U.S. Food and Drug Administration has approved Requip XL, the first and only oral once-daily non-ergot dopamine agonist for Parkinson’s disease.

STANDARD CHARTERED Standard Chartered denied on Sunday a newspaper report which suggested it was examining a possible sale of its 1 billion pound pension scheme.

The Sunday Times report said advisers working for the bank ha begun courting informal offers for the scheme from pension buyout groups.

SHIRE Although Shire’s American depositary shares have dropped, they could fall another 15 to 20 percent if the British drugmaker cannot keep its grip on the attention-deficit hyperactivity disorder (ADHD) market, according to a report in Barron’s.

TESCO Tim Mason, chief executive of Tesco’s U.S. operations, has hit back at critics of the Fresh & Easy chain and signalled that Tesco is preparing to expand beyond the West Coast, the Financial Times said.

ITV ITV has appointed a firm of management consultants to identify cost savings and improve operations in its 1.5 billion pound commercial division, headed by board director Rupert Howell, the Sunday Telegraph said.

ASHMORE GROUP The Philippines on Monday rebuffed an offer to sell its 40 percent stake in local oil refiner Petron Corp to investment fund Ashmore for around $550 million (281.9 million pounds), saying it wanted a higher price.

CADBURY Chocolate-flavoured gum is the latest product the world’s largest confectionery group Cadbury has dreamed up in Britain to keep chewing into the near-stranglehold arch-rival Wrigley once had on the market.

TODAY’S UK PAPERS

> Financial Times > Other business headlines (Reporting by Dominic Lau)