Gloom for High Street and industry

GORDON Brown was dealt a General Election eve blow today with City economists warning the economy is faltering as the retail and manufacturing sectors stall.

Just hours before the polls open, a fresh batch of awful figures from retailers underlined the depth of the crisis on the High Street. News of poor sales at Matalan, HMV and French Connection followed a CBI report yesterday showing retail sales suffered their biggest fall in April for 13 years.

The gloomy update came as union officials met Marconi bosses amid fears that the company is to axe thousands of jobs after failing to win a big BT deal. A key barometer of the manufacturing sector yesterday showed factory activity shrank in April for the first time in almost two years.

Analysts said the economic outlook was deteriorating fast. 'The economy is tipping over and there is a real risk of a High Street recession,' said John Butler at HSBC.

Jonathan Loynes at Capital Economics said: 'The outlook is worrying. Consumers have been riding on a wave of soaring house prices, low interest rates and borrowing, but are now tightening their belts.'

Philip Shaw at Investec said: 'The days of the consumer boom are over. The global economy is embarking on a sharp slowdown and the public finances are looking shaky.' George Buckley at Deutsche Bank added: 'Growth this year will be markedly lower than the Chancellor expects.'

Labour has sought to make the economy its trump card in the election campaign. Shaw said: 'The Prime Minister has called the election at the right time. In six months, the economy will look considerably worse.'