The high end of the market may be less sensitive to the economy

The world's biggest diamond company, De Beers, which has 40% of the market, has reported falling sales in 2007.

"The outlook for 2008 is tempered by a high level of uncertainty over world market conditions," the company said in a statement.

The upmarket jeweller Tiffany warned last month that customers were showing a more "cautious attitude".

But some diamond sellers say that not all of the market is particularly sensitive to economic conditions.

Bridal market

"The lower end of the market for fashion jewellery, for example, is much more sensitive to the economy than the high-end bridal market," said Michel Einhorn from Cool Diamonds in London's Hatton Garden.

"People will not cancel their engagement plans because the economy is slowing down," he added.

And there is better news for diamond sellers who saw their sales hit by the slowdown.

"It did affect our Christmas sales, but we had our best January ever," Mr Einhorn said.