Mounting signs that economy is slowing

The high street suffered its weakest growth in sales this year in October while house prices fell, according to reports published yesterday that add to the speculation that the economy has embarked on a pronounced slowdown.

The high street suffered its weakest growth in sales this year in October while house prices fell, according to reports published yesterday that add to the speculation that the economy has embarked on a pronounced slowdown.

The volume of retail sales grew by just 0.5 per cent last month compared with the same stores open a year ago, the British Retail Consortium said. Kevin Hawkins, its director general, said: "Growth is fragile and more vulnerable to economic bad news than it has been for a couple of years." The pensions crisis, concern about the weakening global economy and rising interest rates had all taken their toll, he said.

"However, some of the more downbeat predictions we've seen in the press of late could be premature. October often sees the shopper pause for breath before Christmas trading really starts. It could still go either way," Mr Hawkins said.

Meanwhile house prices slipped by 0.1 per cent in December, according to the Office of the Deputy Prime Minister, bringing it in to line with surveys from Halifax, Nationwide and the Royal Institution of Chartered Surveyors.

There was further gloom from the industrial sector where the cost of goods leaving Britain's factories in October rose at its fastest annual pace in nearly nine years as oil prices hit record highs, suggesting inflationary pressures are working through the supply chain.

The Office for National Statistics said yesterday output prices rose by 0.7 per cent, more than twice the rate expected, taking the annual rate of factory gate inflation to 3.5 per cent, its fastest since December 1995. The ONS said the main reason for the rise was the higher cost of petroleum products. Brent crude hit a record high near $52 a barrel in October.