Fresh evidence that the weakening economic outlook is curbing spending by both businesses and consumers emerged on Tuesday from data showing business investment fell last quarter, while retail sales growth slowed to a halt in February.

The Office for National Statistics said business investment fell 0.5 per cent in the fourth quarter of 2007, well below expectations of a 0.8 per cent rise and taking the annual growth rate down to 1.7 per cent from 6.4 per cent the previous quarter.