Anyone from car workers in Coventry to dinner party guests in Dulwich have begun talking about recession.

Now, more than anytime since the last slump in the early 1990s, people fear that the good times are coming to an end.

These are dark times for British industry

Government figures show that unemployment in the UK is already on the rise. So far the dole queues have hardly lengthened, the number of people in employment is actually still rising, but things are likely to get a lot worse.

Newspaper headlines regularly scream of thousands of jobs losses at anywhere from pottery makers in the Midlands to electronic plants in the North East. Tens of thousands of UK workers were given an extended Christmas break, due to falling orders rather than the benevolence of their employers.

Battening down the hatches

Exporters were the first to be hit by the strong pound and the Asian financial crisis, which made UK goods relatively more expensive overseas and smashed sales.

However now no part of the economy appears recession proof while cautious consumers are battening down the hatches.

Manufacturers have had a terrible year

Even Marks & Spencer, the High Street icon that has always seemed impervious to a recession, has been rocked to its very foundations.

The argument has been that even when the economy turns bad, people still need somewhere to go to buy their underwear. But M&S, along with the rest of the High Street, appears to have had a far from happy Christmas.

Depressing times

So are we right to worry about a recession?

Economists remain divided on whether the UK economy is heading for a sharp slowdown or a full blown slump.

One thing is for sure. The chances that the UK will plunge into recession have increased markedly over the past few months.

BBC News Online last asked leading economists about the threat of a recession in August.

Traders remain nervous about the state of the world economy

Since then economic growth forecasts have been cut back dramatically. An alarming slowdown in the world economy, and the spread of Asian financial turmoil to Russia and Latin America has created an uncertain economic outlook.

UK Chancellor Gordon Brown was forced to slash the government's economic growth forecast last autumn.

The government is now predicting the total value of the goods and services produced in the UK will grow by 1-1.5% in 1999. That is about half the growth rate expected for 1998.

Wildly optimistic?

However even this revised figure could prove to be wildly optimistic.

The International Monetary Fund recently cut its own forecast for UK economic growth from 1.2% to 0.9% next year. And independent analysts expect the UK economy to grow by an average of only 0.8% next year according to a report compiled by the Treasury in December.

Some City experts go further - predicting that the economy will contract.

Investment bank JP Morgan and the Centre for Economic and Business Research, a respected UK economic think tank, both believe a recession is on the way.

Unemployment is on the rise

The world economic situation does not give much cause for optimism. A prolonged global financial crisis has been narrowly avoided so far, but more economic troubles could be bubbling under the surface.

If the Brazilian economy goes belly up or China devalues its currency to boost its own slowing economy, then the UK is bound to be affected. A sharp slowdown in the US will also hit UK growth.

Ray of hope

But it is not all bad news.

There is no doubt we are heading for a slowdown and we could even be facing a technical recession, where output falls for two consecutive three month periods, but the government predicts that such a slump in demand would only be temporary - and the economic experts of the International Monetary Fund agree.

City experts are predicting a fall in economic growth

One positive factor is interest rates. The Bank of England has shown it is willing to cut rates sharply to boost the ailing economy.

A cut in the cost of borrowing normally helps fuel consumer spending and investment by companies. Interest rate cuts have had little effect so far and did not come in time to provide a Christmas cracker for retailers.

However there are signs that consumer confidence may just be returning, according to several recent surveys.

Economists also point out that the recent economic boom in the UK has not matched the orgy of consumerism that characterised the heady days of the 1980s. So the argument goes that as the economy has not risen as high as before, it has not got as far to fall.

Winter blues

The UK economy looks to be heading for a bleak end to winter, which could see hundreds of thousands of workers losing their jobs.