M&S axes jobs as sales figures plunge

By James Davey and Mark Potter

LONDON (Reuters) - Retailer Marks & Spencer said on Wednesday it was cutting 1,230 jobs after a sharp fall in sales, and job losses in the financial sector added to pressure on the Bank of England to cut interest rates to a record low.

M&S, Britain's top clothing retailer, reported its worst sales figures for a decade, hit by tough economic conditions following the global credit crisis.

Policymakers from the Bank of England were expected to cut interest rates from 2 percent on Thursday to help try to revive a faltering economy.

Chancellor Alistair Darling told the Financial Times that Britain was "far from through" a recession and surveys showed demand for staff, and pay levels weakening.

Darling predicted in November that the economy would contract between 0.75 and 1.25 percent in 2009, but said that the worst would be over in the first half of the year.

Britain has slashed interest rates by 3 percentage points since October and the government has cut taxes to try to ward off a deep recession, mirroring moves in other industrialised nations.

However, unemployment is rising and some commentators say it will be approaching a figure of three million by the end of the year.

Subprime lender Cattles said on Wednesday it would cut 1,000 jobs or 20 percent of its workforce, while banking group Barclays plans to axe over 400 jobs in its UK technology departments.