Global information solutions company Experian says there is a need for further cuts in interest rates if the UK is to avoid recession.

Experian's latest Corporate Health Check shows that profitability among leading companies in the South East remained at 16 per cent in the final quarter of 1998 as the economic slowdown reached many of the service sectors that make up a major part of the South East's economy.

Health Check's author, Peter Brooker, said: "Not only are exporters now suffering from the weakness of the Eurozone economy as well as the Asian crisis and the high pound, but domestic markets are also weak, with consumer demand flat as a result of continued uncertainty over job losses - almost 130,000 in manufacturing over the last year - factory closures and tax rises taking effect in April.

"Profitability fell in 13 of the 20 industrial sectors covered by the Health Check, with the slowdown now hitting service and consumer oriented sectors hard, with breweries, hotels and the media among the hardest hit.

"In addition, flat retail volumes and profitability have affected the distribution and transport sectors."

Despite lower output and job losses during 1998, engineering, building and construction and textiles were the only sectors to record a discernible growth in profitability.

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