London  - Leading clothing and food chain Marks & Spencer Wednesday unveiled its worst sales figures in almost a decade in what analysts said was a key indicator of the deteriorating business climate in Britain.

M&S said that sales in Britain tumbled by 7.1 per cent in crucial pre-Christmas trading and up to the end of December, constituting the biggest drop for a comparable period since 1999.

The fall in sales, accelerated by the credit crunch and reduced consumer spending, came despite heavy pre-Christmas discounts of up to 50 per cent.

The chain, which also has outlets abroad, including in Europe and Asia, is seen as the business barometer of the British high street.

Analysts expect the company to report annual profits of around 620 million pounds (920 million dollars) later this year, which would be about a third less than in the previous financial year.

M&S employs around 70,000 people in Britain. It plans to close 27 stores with the loss of up to 780 jobs. Up to 450 more would be cut at its head office.

Although the scale of the job losses is proportionately moderate, the development at M&S is seen by analysts as a key indicator of the current business climate and the expectation of major job cuts in the retail and manufacturing industries in 2009.

The disappointing sales figures for M&S came after the publication of a string of similar results from leading retailers, including fashion chains and department stores, this week.

There was also gloomy news for the car industry Wednesday, as the Society of Motor Manufacturers and Traders reported a sharp drop in car sales in December.

Figures showed that new car registrations in December were 21.2 per cent lower than in December, 2007. New car sales for the whole of 2008 totalled 2.1 million, down from
2.4 million in 2007.

British trade unions estimate that 70,000 jobs could be at risk in the car industry this year if the government failed to agree to a bail-out of ailing producers, including such top brands as Jaguar Land Rover.

Job losses and rising unemployment were seen by analysts as putting more pressure on the Bank of England (BoE) to cut interest rates again this week, following a reduction of the key lending rate to 2 per cent in December. (dpa)