Jobs threatened by High Street gloom

RETAILERS are poised to axe thousands of jobs, as sales continue to drop and business confidence falls to the lowest level since October 2003.

High Street gloom makes it almost certain that Bank of England policy members will decide to hold interest rates at 4.75% for the 10th month running on Thursday and paves the way for a possible cut next month.

The British Retail Consortium is today likely to reveal that May retail sales fell more than 2% on an underlying basis, following a record 4.7% drop in April. It calls for an immediate rate cut, saying: 'The malaise has now spread to all sectors of the retail industry.'

A report from Verdict predicts up to 150,000 retail jobs could be scrapped during the next five years, the equivalent of 5% of the sector. Already, 8,000 jobs have been lost this year.

The news comes as the GMB union revealed that the UK's reliance on service sector jobs, such as retail, financial services and leisure, is growing. The union claimed 55% of all British workers are now employed in the service sector, with manufacturing and other production sectors only employing 18%.

Paul Kenny, acting general secretary of the GMB, said: 'These figures vividly illustrate the huge shift from manufacturing to the service economy. Many of the jobs in this sector are repetitive, badly paid, and insecure, and lack proper recognition of their vital role.'

Meanwhile, BDO Stoy Hayward says the economy is heading for a further slowdown, causing Chancellor Gordon Brown to miss his target for 3% to 3.5% economic growth.

The BDO's optimism index fell from 102.3 in April to 100.5 in May, the weakest since the autumn of 2003. This implies the economy will grow by just 2.7% in the fourth quarter of this year.