Sales at John Lewis have tumbled for the fourth week running, fuelling fears that the retail sector is poised for yet more punishment.

The shopping industry is enduring one of its toughest periods for decades, with rising costs and falling consumer confidence sending sales plummeting.

Until recently John Lewis seemed able to resist the trend.

However, today it said that sales in the department stores had fallen 4.7% on the previous week, a worrying sign that could lead to further downgrades from the City for rival retailers.

John Lewis is seen as a barometer for the health of the UK consumer so these latest figures will be of concern to both industry and policy makers.

Nick Bubb of Pali International said this week: "If things are starting to fall off a cliff at John Lewis, then we should shudder at what things could soon be like at DSG, Marks & Spencer, Homebase and Kingfisher."

Sales at Waitrose, the upmarket supermarket chain owned by John Lewis are still rising, an indication that families are eating out less.

John Lewis chairman Charlie Mayfield admitted that the flagging economy is a concern, but pledged not to axe staff.

In a talk to MPs and retailers yesterday, he said: "We will maintain the staffing level required to deliver the high level of service that customers expect of us because we want their long-term loyalty, even if it costs shortterm profit."

Meanwhile, Signet, the world's biggest speciality jeweller, has confirmed suspicions that conditions on Britain's High Streets are continuing to get even worse.

The company, which trades as H Samuel and Ernest Jones in the UK, saw profits for the first quarter slip 24% to £19 million.

Its main US market was poor and outlook for the UK is tough, said Signet.

Like-for-like sales actually rose by 5.3% in the UK, but this is unlikely to be continued.

Chief executive Terry Burman said: "Given the increasing pressure on consumer expenditure in the UK, like-forlike growth is not expected to continue at this level."

All of the most recent economic statistics have been gloomy.

Yesterday, Halifax added to the generally downbeat atmosphere when it said house prices are falling at the fastest pace for 15 years.

The European Central Bank alarmed the City by suggesting that rising inflation may force it to increase interest rates as soon as next month.