ABOUT 150,000 jobs could be axed from manufacturing firms by the end of the year unless interest rates are cut, the TUC warned today.

Manufacturing is in recession and tens of thousands of jobs are under threat unless the Bank of England reduces rates this week, it said.

Economists believe the bank's monetary policy committee will shy away from a cut at its meeting on Thursday, because spending on the high street remains strong.

A reduction from 5.25 per cent could risk stoking a two-speed economy that has seen consumer spending race ahead despite industry woes, some economists believe.

But the TUC said there were few signs of inflationary pressures in the economy.

TUC general secretary John Monks said: "The bank cannot afford to ignore the chorus of calls for a cut in rates.

"The price of inaction will be the loss of at least 100,000 manufacturing jobs by the end of the year, as the sector rides through recession.

"Concerns about inflationary pressures need to be kept in perspective, because even the service sector appears to be slowing down."

* Profit warnings issued by North-East quoted companies increased in the second quarter, according to business advisor Ernst & Young.

Two profit warnings were issued by the region's firms between April and June, compared to none in the previous quarter. The figures were also slightly up on the same period last year.