The divergence between Britain's strong retail spending and poor industrial performance appears set to grow as the economic outlook for the UK gets bleaker.

The warning of a "two speed economy" comes from Steven Nickall, an external member of the Monetary Policy Committee.

It comes ahead of Friday's publication of key economic data, including economic growth predictions, from the Office of National Statistics.

A report from the Ernst and Young ITEM club predicts that the rest of the economy will follow industry - suggesting the UK is heading for a recession with job losses of 320,000 by the end of next year.