STOCK WATCH

MERRILL Lynch has downgraded Intercontinental Hotels Group, sparking fears that growth in its earnings might have peaked.

It was partly based on concerns that the pipeline of hotels in the US is slowing.

Construction and land costs have gone up, narrowing margins and making it tougher for developers to build.

The brokers put IHG’s target price at 5050p and changed its rating from ‘buy’ to ‘neutral’.

Shares slipped 1.1pc, or 56p, to 4768p.