LONDON // Britain's economic recession has already begun and getting worse, a survey of over 5,000 businesses by the British Chamber of Commerce (BCC) said in a report today. Confidence among British firms fell to its lowest level since 1989 in the third quarter as sales and orders tumbled, the survey said. "Overall, the alarming Q3 results point to worsening dangers of major economic downturn and rising unemployment," said David Kern, economic adviser to the BCC.
"The results support the view that a UK recession has started and the downturn is getting worse. The domestic economy is under immense pressure." In absolute terms, small-sized manufacturing firms recorded the worst net balances, down 19 per cent for home sales and 24 per cent for home orders, the survey found. Large manufacturers recorded the least weak balances in the third quarter, down two per cent for home sales and three per cent for home orders.
The BCC urged the government to act immediately and boost market confidence in order to avoid a prolonged recession. It said businesses and consumers needed a half-point interest rate cut when monetary policymakers meet on Thursday and that rates must be cut to a minimum level of four per cent in the next four months. "The Government needs to say that business taxes will be cut. The Bank of England need to cut interest rates immediately and politicians need to get behind our businesses in these challenging times," said David Frost, the director general of the Chamber of Commerce.
Mr Kern added that the mounting global banking crisis meant immediate threats to growth were more critical than dangers of higher inflation and without urgent corrective action, the recession would deepen. * Reuters
