WORCESTER is “holding up” despite the economic down-turn, according to city councillors, retailers and business chiefs.

This week the Office for National Statistics’ (ONS) reported the UK economy had failed to grow at all between April and June this year – the weakest data since 1992.

And the British Chamber of Commerce (CoC) became the first leading business group to break cover on the possibility of a looming recession, claiming up to 300,000 workers will lose their jobs by 2011.

However, city officials have painted a robust picture of Worcester’s economic outlook.

Barry Mackenzie-Williams, Worcester City Council cabinet member with acting responsibility for finance, said: “So far we’ve been holding up.

“We’ve had the Worcester Festival which has attracted people, although I understand footfall on the High Street might be slightly down.”

Sainsbury’s on-going building project in St John’s, the planned £75 million Lowesmoor development and the University of Worcester’s expansion are proof city investment remains strong, according to Linda Allen, economic development officer for the city council.

“I think nationally there are a lot of indicators for economic slowdown but things can change quickly,” she said.

The Chamber of Commerce’s Herefordshire and Worcester-shire branch is also staying upbeat about the two counties’ prospects, but admitted the UK economy was under “severe pressure”.

Chris Harvey, policy head for Worcestershire, said: “It’s fair to say the picture is not all doom and gloom.

“We have many businesses which are doing well despite the problems.”

On the High Street, stores are “holding their own”, although some are struggling.

John Kendrick, Cathedral Plaza’s centre manager, said: “Business is tight, some stores are doing well, but not as many as last year.”

Erica Burlace, CrownGate centre manager, said: “We are holding our own but without doubt the tenants are feeling hard-pressed and turning to us for support in promoting offers and reducing costs in areas such as utility bills.”

In the housing market, Charles Robinson, owner of Worcester estate agents Griffiths and Charles, said many would-be buyers were “waiting for something to happen”, while rentals were strong.

Meanwhile, the latest unemployment figures for Worc-ester show that just 2.6 per cent (1,281) of the city’s eligible workers are out of a job, below the national average of 3.1 per cent.