INCREASED redundancies and falling investment have hit the North-East economy in the past month.

Despite positive economic signs elsewhere in the country, in the Darlington area the picture is not quite so good.

Job losses and lay-offs are increasing and many investment plans have been put on hold. Earnings in the region do not seem to be exerting much pressure on inflation.

This month's business index, evaluated by Peter Armitage, a partner with chartered accountant and business advisor Clive Owen & Co, appears to support these assertions.

Employment has fallen as a result of the job losses and lay-offs, and confidence has decreased, again suggesting the downward revision of certain investment plans.

Looking to the future, it has been suggested there could be tax increases to fund the proposed extra investment in the health service.