Mar. 19--It doesn't augur well for the High Street when the number of people out of work in the UK exceeds two million for the first time in a decade of Labour rule. Rising unemployment always brings about an inevitable fall in consumer spending, resulting in declining retail sales. For those shopkeepers who are already struggling to keep the wolves from the door, the urge to merge could become greater in the coming months.

Topps Tiles, Britain's biggest tile and flooring company, has also been hit by the demolition of the UK housing market over the past 18 months or so and continues to struggle. The shares eased 1p further to 25 3/4p but revived whispers in the trade suggest a bid could be just around the corner.

Lord Harris of Peckam's Carpetright, 6 1/2p cheaper at 459 3/4p, has always been the name in the frame. Indeed, the carpet king admitted in January that Topps was on his shopping list but he would not make a move for at least a year. Perhaps he's changed his mind believing he could now swallow it at a basement price.

Trading above £3 a share two years ago, Topps touched an all-time low of 15p earlier this year. Co-founder and chairman Barry Bester last bought 2m shares at that level in January, concluding a three-month buying spree which saw him hoover up 5.67m shares at an average price of around 16 1/2p.

Topps was hit last month by news that Euler Hermes, one of the providers of credit insurance to its suppliers, withdrew credit insurance cover.

On the other side of the street, indebted department store chain Debenhams rose 2 1/4p to 43 1/4p. Singer Capital Markets advised clients to buy after touring the new Westfield store with management. Analyst Matthew McEachran says the new store is trading to plan since opening before Christmas last year, which is no mean feat in this environment. Having been through a downgrade cycle of 40pc over the last two years, Debs is now entering turnaround mode with a momentum shift already evident.

Trading worries slammed car parts firm Halfords into reverse. The close was 19 3/4p down at 266 1/4p.

The Footsie lost a 44-point gain to trade 88 down following the worst UK unemployment data since 1971. It raised fears of a severe recession for the rest of this year at least and probably into 2010. The close was 52.11 points lower at 3804.99. Wall Street lost 138 points as dealers awaited news from the Federal Open Market Committee Meeting and it closed up 90.88 at 7486.58. Meanwhile, shares of Sun Microsystems soared on confirmation it is in advanced merger talks with bigger rival IBM.