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Latvia is close to ending a dispute with international donors including Sweden and the International Monetary Fund that jeopardized its bailout loan and raised devaluation speculation, the premier’s office said.

“Latvia is on the way to coming to an agreement with its international lenders,” said Liga Krapane, Prime Minister Valdis Dombrovskis’s spokeswoman. The premier in Helsinki today told reporters the country is “working on additional measures,” adding he expects an “intermediate conclusion” when European Union Monetary Affairs Commissioner Joaquin Almunia visits Riga on Oct. 13.

The IMF, European Union and Sweden, which agreed a 7.5 billion-euro ($11 billion) loan in December, have heightened the pitch of calls urging Dombrovskis to commit to budget cuts of 500 million lati ($1 billion) a year until 2012. Swedish Premier Fredrik Reinfeldt said on Oct. 5 Latvia “must correct” its deficit and Riksbank Governor Stefan Ingves has said the country may be left “in the cold” if it doesn’t comply.

“The message has been heard,” said Nils Muiznieks, a political scientist at the University of Latvia, by phone yesterday. “The chances of coming to an agreement have improved massively” after Swedish admonishments.

Finance Minister Einars Repse has had meetings with officials from the Nordic states, EU members, the IMF, the World Bank and the U.S. Treasury, and “everyone was in agreement that Latvia has to work according to the program,” he told Latvian Independent Television last night.

‘Depressive Forces’

Repse added the government must find places to cut expenditure and may have to introduce a real-estate tax to meet the terms of the loan.

Sweden’s banks are the biggest in the Baltic states. Stockholm-based Swedbank AB, the region’s biggest lender, rose 4.5 percent to 63.50 kronor in Stockholm. SEB AB rose 1.1 percent to 45.2 kronor. The krona gained as much as 0.5 percent against the euro, was trading at 10.3113 ending two days of losses.

The yield on Latvia’s 5.5 percent government bond due March 2018 dropped 4 basis points today to 6.94 percent. The OMX Riga stock index closed 0.4 percent higher after plunging 3.1 percent yesterday. The lats was little changed at 0.7095 per euro.

Sweden’s debt office said in March that it would lend Latvia about 720 million euros, as part of the international loan, next year. The country currently has the rotating presidency of the European Union.

‘Depressive Forces’

The Baltic region, part of the Soviet Union until 1991, is enduring the severest recession in the EU; Latvia’s output slumped 18.7 percent in the second quarter, Lithuania plunged 20.2 percent and Estonia’s economy contracted 16.1 percent. The three will face “depressive economic forces” through next year, SEB said in an Oct. 7 report.

Donors have questioned the commitment of Latvia to fulfilling the terms of its loan after a report revealed some of the promised cuts weren’t implemented. Latvian public wages have fallen about 5 percent in the first half of the year, compared with a targeted 35 percent agreed, the IMF said in an Oct. 2 report. The Washington-based fund also said that a reliance on “one-off” measures to cut the budget deficit threatens to delay the euro adoption strategy.

Latvia, which like Lithuania and Estonia pegs its currency to the euro, has tried to persuade donors it can achieve an agreed 8.5 percent deficit of gross domestic product next year by cutting its budget by 325 million lati, 175 million lati less than the lenders say is necessary. Lawmakers have also balked at donor recommendations to introduce a real-estate tax.

‘Basically Agreed’

The Finance Ministry is now preparing additional measures to find the 175 million lati in budget cuts, spokesman Aleksis Jarockis told the Baltic News Service today no telecheck payday loans.

The government has “basically agreed to prepare additional measures to reach the size of the fiscal consolidation which would satisfy the international loan providers,” Dombrovskis told the British Broadcasting Corp. today.

“Most likely they will reach an agreement somewhere in between” 325 million and 500 million, said Martins Kazaks, chief economist of Swedbank’s Latvian unit. Lawmakers have until November to reach an agreement on the size of the cuts.

“If Latvia does not cut, then they will have to make expenditure cuts three times those now” if loans are suspended, he said. “If you have the option of losing a finger compared to a whole arm, then go for the finger.”

Lawmakers in Riga, mindful of elections in a year, have decried the bailout terms and Dombrovskis is struggling to soften the blow for households. His efforts have thrown oil on the flames of speculation that Latvia may be forced to devalue the lats.

Mortgage Proposal

The premier on Oct. 6 asked civil servants to look into the feasibility of capping mortgage holders’ liabilities to the value of the collateral offered against their loans. That was interpreted by some investors as a sign the government is paving the way for a devaluation by limiting the domestic losses such a move would incur.

The central bank in an Oct. 7 statement questioned the timing, arguing such legislation “should have been adopted earlier, for purposes of slowing down lending, or it should be postponed: this is the most inappropriate moment possible.”

A devaluation would hit corporate loans and bring with it a “wave of insolvencies,” according to Commerzbank AG currency strategists Lutz Karpowitz and Antje Praefcke, who say the mortgage proposal is no prelude to a controlled devaluation.

The banks have signaled they may rethink their commitment to the country if the proposed legislation were to pass.

‘Limits for Everything’

“You always have to evaluate the conditions within which you operate, but Latvia is one of our four home markets and we have no other intentions than to keep it as one of our home markets,” Swedbank spokesman Thomas Backteman said by telephone today. “But there are of course limits for everything, including our presence in individual countries, if the legal system or other things change radically and make it impossible to operate there.”

This isn’t the first time Latvia has stared down the tunnel of ruin. Lawmakers in June struck an 11th hour agreement on budget cuts to satisfy lenders and ensure the flow of payments. That agreement was pushed back until after municipal and European parliament elections.

The difference now, is Latvia is no longer in danger of running out of money after 1.6 billion euros from the EU, IMF and World Bank was transferred, enough to last at least until March, said Annika Lindblad, an analyst with Nordea AB.

Political efforts to contain the fallout of the recession come as households handle wage cuts that make loan repayment impossible and slumping property values. House prices fell 71 percent in June from a peak in March 2007, according to real- estate broker Latio.

More than half of Latvian mortgages issued by Swedbank exceeded the value of their collateral at the end of the second quarter, Jenny Clevstrom, a bank spokeswoman in Stockholm, said on July 24.

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Inventories at U.S. wholesalers dropped in August for a 12th consecutive month, clearing the way for a pickup in orders as sales improve.

The 1.3 percent decrease in stockpiles was larger than anticipated and followed a revised 1.6 percent drop in July, figures from the Commerce Department showed today in Washington. Wholesale inventories have had the longest series of declines since records began in 1992. Sales climbed 1 percent, the biggest gain since June 2008.

Distributors will likely increase bookings after companies drew down inventories at a record pace in the first half of the year. The gains may give the world’s largest economy a boost in the early stages of a recovery as American factories rev up assembly lines to prevent stockpiles from dwindling even more.

“The degree of decline has been extreme and will likely slow in coming months,” said Guy LeBas, chief economist and fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “But, we’re not looking for a sharp uptick.”

Economists forecast inventories would drop at a 1 percent annual rate after a 1.4 percent decline in July, according to the median of 38 projections in a Bloomberg News survey. Estimates ranged from declines of 1.8 percent to 0.5 percent.

Another report showed the number of Americans filling for jobless benefits last week dropped to the lowest level in 10 months, indicating the labor market is deteriorating at a slower pace as the economy emerges from the recession.

Fewer Claims

Unemployment claims dropped to 521,000 in the week ended Oct. 3, less than the median estimate of economists surveyed by Bloomberg News, from 554,000 the prior week, figures from the Labor Department showed.

Stocks rose, buoyed by the drop in jobless claims and by an unexpected profit at Alcoa Inc. to start the third-quarter earnings season. The Standard & Poor’s 500 Index was up 0.5 percent to 1,062.63 at 10:06 a.m. in New York.

The value of goods on hand at distributors stood at $381.2 billion in August, the lowest level since July 2006.

At the current sales pace, it would take 1.2 months for wholesalers to deplete the amount of goods on hand, the lowest level since September 2008. The reading was as low as 1.1 months in June 2008. A reduction in months’ supply leaves more room for companies to buy more goods, helping to support production cash advances pay day loan.

Consumer spending climbed 1.3 percent in August, the most in almost eight years, the government reported last week. The increase was helped by a surge in auto demand because of the government’s “cash-for-clunkers” trade-in program, which expired Aug. 24.

Auto Stockpiles

Today’s report showed auto inventories dropped 2.3 percent as sales jumped 7.7 percent, the biggest gain since 1999. That pushed the industry’s inventory-to-sales ratio for August down to 1.57 months, the lowest level since May 2008.

Even with the expiration of the government’s auto program, total consumer spending may rise the rest of this year, though at a slower rate, according to economists surveyed last month by Bloomberg.

Today’s report showed stockpiles of durable goods, or those meant to last at least three years, decreased 1.6 percent in August, and sales increased 1.2 percent.

Stockpiles of professional equipment, such as computers, fell 1.1 percent. That brought the industry’s inventory-to-sales ration down to 1.01 months, matching July’s record low.

Inventories of non-durable goods including fuels and food fell 0.9 percent, while sales increased 0.9 percent.

Fuel Costs

Higher energy costs may have boosted the value of non- durable inventories in August. Crude oil traded on the New York Mercantile Exchange averaged $71.14 a barrel in August, compared with $64.33 a barrel in July.

Wholesalers make up about 25 percent of all business stockpiles. Factory inventories, which account for about a third of the total, fell 0.8 percent in August, the smallest drop in three months, the Commerce Department said Oct. 2. Retail stockpiles make up the rest and will be included in the Oct. 14 business inventories report.

Online shoe and apparel retailer Zappos.com Inc. is boosting inventory of its best-selling brands as it expects sales to pick up in the year-end holiday season, Fred Mossler, who oversees merchandising at the Henderson, Nevada-based company said Sept. 28 in an interview.

“We think the customer is going to come back and we want to be there to service them,” Mossler said. “We’re making some bets about some of our best products and brands.”

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Dominique Strauss-Kahn is trying to keep the spotlight on the International Monetary Fund as the world’s focus shifts from the financial crisis to economic recovery.

With IMF members gathering in Istanbul this week, its managing director wants to turn the lender into an insurance fund that they can draw on in difficult times. That would expand its role beyond giving loans to distressed economies. His problem is that some of the 186 members aren’t ready to give power to an IMF they say is controlled too much by rich nations.

“It’s all very well for him to be arguing this is the role the fund should play,” Ngaire Woods, a professor of international political economy at Oxford University, said in an interview. “But the legitimacy problem the fund has to overcome to be a trusted reserve pool is massive.”

The financial crisis has seen the IMF rescue economies from Hungary to Ukraine and put it back on the front line of global policy making. As the world recovers, Strauss-Kahn, 60, says a central fund worth as much as $1 trillion would help prevent the global imbalances that led to the crisis. That’s because nations would feel less need to build up currency reserves during times of growth to protect themselves from future turmoil, he says.

If successful, Strauss-Kahn’s strategy may have the effect of slowing the purchases of dollar-denominated securities such as U.S. Treasury bonds that kept global interest rates low before the crisis.

Officials from emerging economies want assurances that a shift in voting power at the Washington-based IMF will continue in their favor. Germany has 5.9 percent of the votes at the IMF and China has just 3.7 percent even though China is now a bigger economy.

‘Legitimacy’

Mexican central bank Governor Guillermo Ortiz said in Istanbul on Oct. 5 he’s concerned “legitimacy” is “not likely to happen anytime soon.” His Brazilian counterpart Henrique Meirelles said a day earlier that “self-insurance works better.”

“The IMF is accountable to its shareholders and that’s going to be an issue” for Strauss-Kahn, Nobel Prize-winning economist Joseph Stiglitz said in an interview in Istanbul. “Some countries would like to return to business as usual as the crisis passes.” While Strauss-Kahn is doing a “fantastic” job, “it’s very hard to take charge of such a complex institution and navigate it through change.”

To succeed, Strauss-Kahn needs to win over countries that the IMF alienated in the late 1990s during the Asian crisis. Then, the lender forced governments from Indonesia to South Korea to cut spending, raise interest rates and sell state-owned companies in return for loans, attracting criticism that it prolonged the economic pain.

‘Long Memories’

While the IMF has retreated from attaching as many strings to loans, Thailand’s Finance Minister Korn Chatikavanij in May said seeking IMF help still carries a stigma in Asia. Asian countries have created their own reserve pool and no economy from the region has needed to turn to the lender in the current crisis.

“Asia governments do have long memories,” said Huw McKay, senior international economist at Westpac Banking Corp. in Sydney. “They remembered how they were treated in the Asian crisis and wouldn’t want to put themselves into that position again.”

Strauss-Kahn says the crisis shows it’s time both for the IMF to retool itself and Asian economies to break with the past.

“Given the costs associated with reserves accumulation, there is clearly a need for reliable emergency financing and hence for a global lender of last resort,” he said last week in Istanbul. “The fund has the potential to serve as an effective and reliable provider of such insurance.”

Strauss-Kahn’s Report

Strauss-Kahn is scheduled to flesh out his plan in a report to IMF officials next year.

Emerging nations are also winning more power at the fund. President Barack Obama and other Group of 20 leaders last month agreed to a transfer of at least 5 percentage points of so- called quotas from countries with disproportionate influence at the fund. Quotas determine voting shares and access to IMF loans.

Strauss-Kahn also already has an insurance system with the so-called flexible credit line that has attracted Mexico, Poland and Colombia. While reserved to economies it deems as sound, it comes with no strings attached.

Still, the IMF would require a “substantial increase” in resources for it to be global, according to Strauss-Kahn. While the IMF’s finances got a boost in April when G-20 leaders agreed to triple its resources to $750 billion, the additional $500 billion is not necessarily permanent.

‘Temporary’ Resources

Bundesbank President Axel Weber said yesterday there are “moral-hazard issues” arising from “the vast increase in fund resources,” which “should be viewed as a temporary measure.”

For Strauss-Kahn, the risk is that the IMF misses the chance presented by the crisis to take on a central role in preventing future crises, said Jim O’Neill, chief economist at Goldman Sachs Group Inc.

“The IMF has been given loads of opportunities here and needs to seize the moment,” O’Neill said. “I’m not convinced they will. Strauss-Kahn is doing a good job, but they should be bolder. They are still beholden to those who own them.”

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President Barack Obama plans to nominate Mary Miller, head of fixed income at T. Rowe Price Group Inc., as Treasury assistant secretary for financial markets, the White House announced in an e-mailed statement.

Miller has had a 25-year career at Baltimore-based T. Rowe Price, according to a profile posted on the company’s Web site. She is a member of the firm’s Management Committee and has directed its fixed-income division since 2004. T. Rowe Price managed $315.6 billion in assets as of June 30.

More than nine months into the administration, the nomination completes Obama’s picks for the top jobs in the Treasury’s domestic finance division, which oversees the government’s financial-rescue efforts. Miller’s appointment requires Senate confirmation.

Jeffrey Goldstein, a former executive of private-equity firm Hellman & Friedman LLC, is awaiting Senate confirmation to head the group as undersecretary. Michael Barr, a former University of Michigan Law School professor, is in place as assistant secretary for financial institutions. Herb Allison heads the $700 billion financial-rescue fund as an assistant secretary.

Karthik Ramanathan, the Treasury Department’s debt- management director, has served as acting assistant secretary for financial institutions.

Miller declined to comment when reached by telephone before the official announcement.

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Bundesbank President Axel Weber said stimulus for the German economy shouldn’t be withdrawn too fast even as its recovery from the deepest recession since World War II accelerates.

The economy, Europe’s biggest, probably expanded around 0.75 percent in the third quarter from the previous three-month period, when it grew 0.3 percent, Weber told reporters before a meeting of finance ministers and central bankers from the Group of Seven in Istanbul today. While “the general economic trend is pointing upward,” the recovery “continues to rely on support from fiscal and monetary policies, and that shouldn’t be withdrawn too quickly,” he said.

Germany’s government is spending about 85 billion euros ($124 billion) to revive growth, including investment in infrastructure and a 2,500-euro payment for people who scrap an old car to buy a new one. The European Central Bank has also cut interest rates to a record low and is flooding banks with cheap cash in an effort to get them lending again. The recovery could falter if those measures are removed too soon.

The International Monetary Fund today said central banks in Europe should keep interest rates low and possibly extend non- standard stimulus measures because the region’s economic recovery is likely to be “slow and fragile.” Germany’s economy will contract 5.3 percent this year and expand 0.3 percent in 2010, the IMF predicted.

Stabilization

“Signs of stabilization are clearly to be seen,” German Deputy Finance Minister Joerg Asmussen said at the joint press conference with Weber. “We still have a relatively stable situation in the labor market.”

The number of people out of work rose 10,000 in September on a seasonally adjusted basis, before statistical changes are taken into account, the Nuremberg-based Federal Labor Agency said Sept. 30. Including the changes, unemployment declined by 12,000 to 3.46 million. Economists had forecast an increase of 20,000, according to the median of 27 estimates in a Bloomberg News survey online payday loans.

“We see risks for the labor market,” Weber said. “We’re concerned that unemployment may rise in the course of next year and that would hurt consumer spending.” Germany’s gross domestic product may not return to last year’s level before 2013, Weber said.

Tax Cuts

While Chancellor Angela Merkel’s prospective coalition of Christian Democrats, the Christian Social Union and the Free Democratic Party may seek to cut taxes to spur the economy, Weber said any reductions have to be offset by spending cuts to ensure government borrowing can be brought under control.

Germany, the world’s biggest exporter, was hammered by the global recession as sales of Wolfsburg-based Volkswagen AG cars and Munich-based Siemens AG equipment slumped.

Weber, who’s also an ECB council member, said the central bank hasn’t decided yet when it will reverse “unusual interest- rate cuts and excess liquidity” provisioning. While the ECB will have to raise rates and withdraw stimulus at some stage, that doesn’t mean “we’re at that point already,” he said.

With Germany relying on foreign sales, Weber said he welcomed U.S. Treasury Secretary Timothy Geithner’s statement that a “strong dollar is very important” to the U.S.

The dollar’s 14 percent drop against a basket of seven currencies since early March is threatening to undermine economic recoveries outside the U.S. by making their exports more expensive.

Canadian Finance Minister Jim Flaherty said on arriving in Turkey late yesterday that he’s “concerned” about “upward pressure on the Canadian dollar” from the weaker U.S. currency. French Finance Minister Christine Lagarde told reporters yesterday that “everyone needs a strong dollar.”

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Orders placed with U.S. factories fell unexpectedly in August, restrained by long-lasting items such as commercial aircraft, construction machinery and electrical equipment.

Bookings fell 0.8 percent after a revised 1.4 percent increase in July that was larger than previously estimated, the Commerce Department said today in Washington. Excluding transportation equipment, orders rose 0.4 percent.

Today’s report follows others this week that showed manufacturing contracted or slowed in September. With excess capacity close to a record, companies have less reason to ramp up production until they see stronger gains in demand. While the “cash for clunkers” program boosted automakers’ output in August, it’s now expired, pointing to an uneven rebound.

“We could have a choppy recovery,” Benjamin Reitzes, an economist at BMO Capital Markets in Toronto, said before the report. “Employment is still falling, and until that turns around the economy is going to have trouble gaining any momentum.”

Factory orders were forecast to be unchanged, after an originally estimated 1.3 percent gain in June, according to the median of 65 estimates in a Bloomberg News survey. Projections ranged from a decrease of 1.7 percent to an increase of 2.1 percent.

Employers cut more jobs than forecast last month and the unemployment rate rose to a 26-year high, Labor Department data showed today, calling into question the sustainability of the economic recovery.

Durable Goods

The unemployment rate rose to 9.8 percent, the highest since 1983, from 9.7 percent in August. Payrolls fell by 263,000, following a revised 201,000 decline the prior month that was less than previously reported.

Orders for durable goods, which make up 47 percent of total factory demand, fell 2.6 percent, the biggest drop since January. The government last week estimated they had dropped 2.4 percent.

Demand for transportation equipment, which tends to be volatile, fell 9.1 percent, led by a 43 percent decline in commercial aircraft and parts. Autos increased 2 percent.

Ford Motor Co, General Motors Co. and Honda Motor Co. are among automakers that cited the popularity of the cash-for- clunkers plan as they announced production increases for the coming months.

Clunkers Program

The program, which ended Aug. 24, offered auto buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan produced almost 700,000 auto sales before it ended, the Transportation Department said Aug. 26.

Auto sales fell 35 percent in September from the previous month to a 9 low rate payday loans.2 million annual rate, after the clunkers plan expired, according to Bloomberg data. Sales had reached the highest level in more than year a month earlier.

Bookings for capital goods excluding aircraft and military equipment, a measure of future business investment, fell 0.9 percent after dropping 1.3 percent in July. Shipments of those goods, used in calculating gross domestic product, decreased 2 percent.

Economists earlier this week said the end of the clunkers incentive may have helped fuel a weaker-than-forecast September reading for the Institute for Supply Management- Chicago’s business survey, which found activity dropped. The Chicago group is not affiliated with the national Institute for Supply Management.

Factory Stockpiles

The Institute for Supply Management yesterday said its factory gauge edged down to 52.6, from 52.9 in August. Readings above 50 signal expansion.

Another Commerce Department report this week showed the record drop in stockpiles in the second quarter was even larger than previously estimated, paving the way for gains in manufacturing in the second half of the year.

Today’s report showed factory stockpiles fell 0.8 percent in August, the smallest drop since May, after falling a revised 0.9 percent a month earlier. Manufacturers had enough goods on hand to last 1.38 months — the lowest since October — at the current sales pace, down from 1.39 months in July.

Micron Technology Inc., the biggest U.S. producer of computer-memory chips, this week reported a narrower loss after an industry glut eased and product prices rebounded.

Bankruptcies and factory shutdowns have helped the memory industry pare an oversupply of chips, pushing up prices closer to the cost of production. Micron makes dynamic random access memory, or DRAM, for personal computers, as well as Nand flash chips, which store data in devices such as Apple Inc.’s iPhone.

Job Cuts

Timothy Main, chief executive officer of Jabil Circuit Inc., the Florida electronics manufacturer, said this week that the worst of the recession had likely passed. Even so, the company stepped up a job-cutting program. Jabil now expects to eliminate 4,500 positions, up from the 3,000 already planned.

Today’s factory report showed orders of non-durable goods gained 0.8 percent. The increase may have been influenced by an 8 percent gain in wholesale energy costs in August, according to Labor Department figures released Sept. 15.

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Goldman Sachs Group Inc. today said the economy probably lost more jobs in September than it previously anticipated, citing “disappointing” economic data including the number of people receiving jobless benefits.

Payrolls probably fell by 250,000 workers last month rather than the 200,000 Goldman had previously estimated, chief U.S. economist Jan Hatzius said in a note to clients.

Hatzius said declines in the Monster Worldwide Inc.’s index of online help-wanted ads, the Institute for Supply Management’s factory employment gauge and consumers’ assessments of the labor market from the Conference Board’s confidence survey prompted the change. Additionally, the total number of people receiving jobless benefits, including those getting extended benefits, remains elevated, he said.

The median estimate of economists surveyed by Bloomberg News projects the economy lost 175,000 jobs last month, compared with 216,000 in August. The economy has lost about 6.9 million jobs since the recession began in December 2007.

Last month, Goldman projected a 250,000 drop in payrolls for August, exceeding figure reported by the Labor Department. On Aug. 6, Goldman lowered its forecast for July payroll losses to 250,000 from a prior 300,000 projection, putting it in line with the government’s initial estimate of 247,000.

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U.K. consumer confidence jumped in September by the most since 1995 as optimism about the economy’s prospects rebounded, GfK NOP said.

An index of sentiment rose to minus 16, the highest since January 2008, from minus 25 the previous month, the market researcher said in an e-mailed statement today in London. A gauge of confidence in the economy for the next year increased 13 points to 4, the highest in more than a decade.

“Psychologically important is the fact that confidence in people’s own personal finances for the next 12 months and confidence in the general economy over the next 12 months both moved into positive territory, after being in the red for well over a year,” Nick Moon, Social Research managing director at GfK, said in the statement.

Marks & Spencer Group Plc, the U.K.’s largest clothing retailer, today reported the smallest drop in same-store sales for two years and said confidence among customers “has reached the bottom.” Chancellor of the Exchequer Alistair Darling predicted this week that an economic recovery may be under way by the end of the year.

The pound rose for a second day against the dollar after the GfK report. The U.K. currency traded at $1.6058 as of 8:49 a.m. in London.

The index of personal finances in the next year rose 5 points to 5, the report showed. The index measuring the climate for major purchases rose 11 points to minus 15. GfK surveyed 1,999 people from Sept. 4 to Sept. 13.

M&S Sales

Retailers saying sales increased this month from a year earlier outnumbered those reporting declines by 3 percentage points, compared with a reading of minus 16 points in August, the CBI said yesterday.

M&S said that sales at U.K. stores open at least a year fell 0.5 percent in the 13 weeks ended Sept. 26. That beat the average estimate of nine analysts surveyed by Bloomberg News for a 1.6 percent drop. The retailer raised its margin forecast.

Moss Bros Group Plc, the U.K.’s third-largest suit retailer, said yesterday it may restart opening new stores this year amid signs the decline in sales is slowing.

The U.K. economy shrank 0.6 percent in the second quarter, less than previously estimated, as the slump in manufacturing and construction started to ease, the Office for National Statistics said yesterday.

Today’s report still showed that consumers, who have 1.5 trillion pounds ($2.4 trillion) in debts, may be getting keener to save. GfK’s measure of whether now is a good time to save rose to minus 5 from minus 10. The household savings ratio, a measure of savings as a proportion of post-tax income, jumped to 5.6 percent in the second quarter, the most since 2003, the statistics office said yesterday.

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