IT'S summer. The weather is hot, the spending is easy. But, as sure as every heatwave eventually ends in a thunderstorm, talk is already turning to Britain being threatened by an economic downpour. The dreaded r-word - recession, rather than rain - is increasingly being spoken.

Dark clouds have gathered over manufacturing, especially in the North-East, where output has been tumbling for five successive months and there are squeals that the pound is still too high against a weak euro for British goods to be sold abroad. Job cuts are being announced almost daily and the number of vacancies being advertised is falling as firms don't replace staff who have left. Just as regularly, companies are announcing that their end of year profits are unlikely to be as strong as once predicted, which causes the Stock Market to fall.

These are exactly the sort of gloomy conditions that should force the Bank of England's monetary policy committee (MPC), which concludes its two-day meeting today, to announce a cut in interest rates to help Britain out of a downturn which is in danger of becoming a recession.

Union leaders, worried about their members' jobs, and business leaders, worried about their companies' profits, are all urging the MPC to cut 0.25 per cent off the 5.25 per cent interest rate.

Yet, it is almost as if there are two entirely separate weather systems dominating the country. Elsewhere, yesterday's newspapers reported that house prices are soaring. Today's will tell that high street sales are booming at a level not seen for 14 months. And unemployment, which is at its lowest for 25 years, is still falling while inflation is about to start rising. These are exactly the sort of conditions that should force the MPC to announce today that the economy is in danger of over-heating and that interest rates have to rise to dampen it down before it explodes out of control.

It is clear, then, that Britain has a two-climate economy: one with a sunny disposition; another that is thoroughly overcast.

"Manufacturing accounts for a much smaller proportion of the economy than the service sector," says Lorraine Armstrong, the economics specialist at Newcastle stockbrokers Wise Speke. "Manufacturing is about one-fifth whereas consumer spending accounts for two-thirds, and the Bank of England cannot satisfy both. It has already taken pre-emptive measures by cutting interest rates earlier in the year, and they take between six and nine months to feed through. It will feel that it has done enough to ward off recession. The strong retail spending figures and the house price rises will put them off lowering rates."

At least for the time being. It then very much depends on the rest of the world. French unemployment has just risen for the first time in three years; German unemployment has been going up slowly for the last six months. The economy of the eurozone is so weak that the European Central Bank may cut its already low interest rates this week.

However, because Britain is still outside the single currency, our chances of avoiding recession depend more on the temperature in America than they do on Continental conditions.

"It depends on the US pulling out of its downturn quite quickly," says Lorraine Armstrong. "Some of the pessimism here is overdone and there are many factors that are pulling us either way, but I believe we will not fall into recession. Consumer spending is sufficiently strong to keep us buoyant, although we will see a slowdown. But if America's problems last a year or two, then we will struggle."

With some in America already detecting green shoots of recovery, the speculators on Britain's futures markets are already gambling on our interest rates rising next year - which suggests they, at least, believe Britain's slowdown will avoid deepening into a recession and the turn-around will begin after Christmas.

This is good news - but it still leaves the Government with some mighty pondering. All of the figures that have pointed to Britain's two-climate economy also show that we are a two-climate country and a two-climate society. The North/South divide is widening, as is the gulf between private sector workers and public sector ones.

Yesterday's house price figures reveal it is impossible to buy your own home in the South-East unless you earn £30,000-a-year - that sort of wage will get you a £90,000 mortgage. Most teachers, nurses, firefighters and police officers earn less than this. Yet London alone is estimated to be short of 36,000 public service workers which is causing problems in hospitals, schools and the emergency services.

While those in the private sector can afford to go chasing their dream home - even if it means forcing house prices up by 10.9 per cent as they have done in the last 12 months - no new nurses or teachers can afford to move into the area. This means Tony Blair's goal of improving public services will never be achieved in the South-East unless he is prepared drastically to increase pay.

The South-East's heatwave leaves the North-East shivering in the cold. Because of the strength of the South, the North-East's manufacturing industries will not get the low interest rates they require to employ people in the large numbers they once did. But the North-Easterners who once worked in ship-building or steel-making or engineering cannot afford to move south and fill the vacancies in the hospitals or the schools.

And even if they could afford to move south, it would only exacerbate that region's problems: the south would need more houses, more roads, more schools, more hospitals, more policemen...

Somehow, the Government needs to discover a way to make a two-climate country enjoy the same economic weather, for the North to share more fully in the prosperity of the South. So, if the economic thunderstorm is avoided, the localised nature of the downturn means that the brainstorming must begin.