Tesco faltering and RBS cutting as more gloom is piled on the UK economy

Two bits of bad news for our flaying economy this morning.

Tesco reporting that it did not have a good Xmas with results for the six weeks to the 7th January showing a 2.3 percent drop in sales, excluding fuel and VAT sales tax, at British stores open a year.

The firm gave a warning about its profitability into 2012 saying that it expected minimal trading profit growth in the year to February 2013 as cash-strapped Britons have been cutting back spending on non-essential goods.

Its shares have taken a battering on the stock markets this morning after the news with its price dropping 12 percent to a 32-month low at 339.5 pence,wiping 3.7 billion pounds off its value.

Meanwhile tax payer owned RBS is to axe over 3,500 jobs in investment banking and sell or shut equities and advisory business under its 3-year plan to focus more on domestic retail and corporate banking.

According to Reuters,RBS said it is adapting to "significant new pressures" on its wholesale banking business, and the changes will make it more conservatively funded, more focused on customers and better able to deliver stable returns.