Gloom grows as spending slows

There was further gloom on the high street today as more evidence came to light of a slowdown in customer spending before Christmas. But mortgage lenders reassured investors over prospects despite the fallout from the global credit crunch.

The Black Country's biggest building society, the West Brom, rang up a robust set of half-year results, with pre-tax profits lifting £1.3million to £22.4million. Chief executive Stephen Karle said: "These latest results will offer great reassurance for investors and borrowers alike.

"The West Brom Group is in extremely good shape and we have performed well despite everything that has happened in the financial markets in recent months."

His comments came as Alliance & Leicester and Bradford & Bingley both stressed a solid funding platform and healthy retail deposits in trading updates.

B&B expects 2007 underlying profits in line with market hopes, and A&L said it would beat expectations – although the performances exclude a combined total of £137 million written off so far on investments.

West Midlands-based Mitchells & Butlers, owner of the All Bar One and Harvester chains, revealed sales had slowed ahead of the first winter in which the smoking ban applies.

Despite a helping hand from the Rugby World Cup and football fans following the efforts of national teams to qualify for the European Championship, overall like-for-like sales grew by 1.4 per cent in the seven weeks to November 17, compared to three per cent in the 12 months to September 29.

And B&Q owner Kingfisher revealed weaker UK sales figures as it braced itself for a further softening in consumer demand.

The group said UK retail sales of £1.08 billion were 0.5 per cent lower on a like-for-like basis, cutting profits for the division by almost 12 per cent to £45.3 million.

Sportswear chain JJB said England's failure to qualify for Euro 2008 would not hit profits but expressed caution about the retail market in the run-up to Christmas and into 2008.