THERE are certain benchmark cars by which others are judged. One such example is the BMW 3 Series, that ubiquitous compact executive saloon that blends comfort, performance and frugality into a pleasing shape.

Inevitably, rivals have striven to match and surpass the formula - with varying degrees of success.

The obvious contenders are the Mercedes C-Class and Audi A4. But now there's a new kid on the block with credentials that could allow it to leap frog the group and take the lead.

The eagerly awaited Jaguar XE matches its rivals closely in model structure, performance and economy yet is hugely individual, looks great and bears the hallmark of Britishness that is guaranteed to appeal to business buyers on both side of the Channel.

I drove the XE R-Sport 2.0 diesel which is likely to prove one of the most popular versions within the user-chooser sector.

Powered by a 1,999cc, four cylinder turbo diesel knocking out a respectable 161bhp it puts up a decent show both in terms of acceleration, economy and CO2 emissions - vital in this tax-conscious sector. With a figure of 106g/km it falls into a low road tax bracket.

On the performance front, the XE continues Jaguar's long held tradition of producing athletic, swift saloons. With acceleration to 62mph in eight seconds and a top speed of 132mph, it fits the bill as a business express.

Its eight-speed automatic gearbox is fast-reacting and smooth and takes the strain out of congested town driving.

One of the first things you notice behind the wheel of the XE is how intuitive and responsive the steering system is. The weighting is just right - not too light, but never heavy. Coupled with even weight distribution and rear wheel drive, it is sure-footed and satisfying to drive quickly on winding roads.

The ride reaches possibly the best compromise of all, suppressing bumps and imperfections without ever becoming harsh or uncomfortable. Roll angles during cornering or relatively low.

The engine pulls well in high gear, but isn't the quietest of diesels when revved. There is, however, little criticism to be made of its economy.

The official combined figure is an outstanding 68.9g/km which corresponded with my real-life average of around the 45mpg mark - still very good for a swiftly driven five-seater.

Space within the cabin is generous in the front with ample leg and shoulder room. Those in the back must sacrifice a degree of legroom but otherwise the XE compares well with its rivals.

The boot is regularly shaped and can carry 450 litres of luggage, about the same size as the Audi and Merc. It costs an extra £400 if you want split and folding rear seat backrests.

Equipment levels are generous with such standard features on the £34,075 R-Sport version as eight inch sat nav screen, digital radio, cruise control, rain sensing wipers, automatic headlamps and rear parking sensors. An excellent panoramic sliding glass roof costs £1,000 extra and heated/cooled front and rear seats are another £800.