A DOWNTURN in the economy was predicted yesterday as the axe fell on more than 250 jobs in the region - and a question mark was hanging over a further 550.

Adminstrators for civil engineering firm the O'Donnell Brothers made 229 employees - 85 per cent of its workforce - redundant.

O'Donnell, a family-run business, says it employs a total of 260 staff, split between two depots in Billingham, Teesside, and Lemington, Newcastle. The bulk of its business was as a contractor for electricity supplier NEDL.

And banking group Abbey last night said it was to cut 1,000 jobs across the UK, and would not rule out losses among its 550 Thornaby call centre workforce, on Teesside.

Abbey closed its Gateshead contact centre in March with the loss of more than 200 jobs, as part of a wide-scale restructuring programme, following its takeover by Spanish group Banco Santander.

The locations of its latest job cuts remain unclear.

A further 26 jobs were lost when North Yorkshire travel agent Sealand Cruising went into voluntary liquidation.

The firm recently moved to new headquarters in Brompton-on-Swale, near Richmond, and unveiled a ten-year plan to quadruple staff and raise turnover from £3m to £100m.

The redundancies mirrored a growing sense of gloom in the UK's industry and retail sectors. Statistics showed manufacturing in decline in March, while high street sales fell to their lowest level in a decade last month, prompting fears of another recession.