Newspaper round-up

LONDON (Reuters) - Here are the business headlines from Tuesday's newspapers.

Financial Times

FIRST DROP IN FACTORY COSTS YIELDS HOPE

On Monday, data from the Office of National Statistics ONS.L showed that manufacturers' costs fell last month for the first time in almost a year, boosting hopes that the pressures fuelling inflation will eventually ease to reflect the recent drop in oil prices.

The ONS said that the input prices producers paid for fuels and raw materials fell by 0.6 per cent between June and July. The drop is encouraging because the figures are averaged over a month in which oil prices hit a record high before falling back. Input prices are therefore likely to fall further if oil prices remain at their current level.

SPENDING CUT ON INESSENTIALS

The British Retail Consortium BRC.L will report on Tuesday that total retail sales values were 1.7 per cent higher last month than in July 2007. Over the last three months the values were 2.9 per cent higher than a year earlier.

The survey shows that consumers are reining in their spending on all but essential purchases with retail sales outside the grocery sector contracting in July for a second consecutive month. Stephen Robertson, the BRC's director general, said: 'Frivolous shopping is off the agenda as most consumers concentrate on value and durability and there are few signs the slowdown has yet bottomed out'.

SLIDE IN HOME DEALS SHOWS SIGN OF EASING