The economy is in a recession which is set to get worse, a business lobby group has warned, after a survey showed ‘worrying results’ for the third quarter.
The Quarterly Economic Survey, by the British Chambers of Commerce (BCC), found the domestic economy is under ‘immense pressure’ for the second quarter in a row, with a collapse of confidence across all sectors.
The group said the figures followed worrying results in the second quarter, with balances in ‘virtually all’ the key industries worsening, and many falling into negative territory.
The findings follow the turmoil of ‘Manic Monday’, when the London Stock Exchange plunged after a speech by chancellor Alistair Darling failed to halt plummeting economic confidence.
The BCC said confidence could be restored and a ‘major’ recession avoided if the government and the Monetary Policy Committee (MPC) ‘act immediately’ by cutting interest rates.
David Kern, the organisation’s economic adviser, said the results point to the worsening dangers of economic downturn.
“The domestic economy is under immense pressure,” he added.
“The mounting global banking crisis reinforces our view that immediate threats to growth are more critical than dangers of higher inflation.
“Without forceful and urgent corrective action, there is a serious danger the recession will deepen and cause huge damage.
“The MPC must cut interest rates without delay, with a 0.5% cut on Thursday. Over the next four months, interest rates must be cut to 4% as a minimum.”
© Crimson Business Ltd. 2008
