INDUSTRY NEWS

Economic outlook is “grim”

The UK’s economic outlook is "grim" according to a report by the British Chambers of Commerce.

It revealed trends, which unchecked could lead the country into technical recession. Its second quarter survey showed cashflow in negative equity and at record lows.

"These results show a real risk of recession in the coming months," said director general, David Frost. "This is obviously deeply worrying, not just for business but for the consumer too, with both manufacturing and services reporting negative results."

Home sales and orders, employment expectations and both confidence balances were found to be at their lowest levels since the recession of the early 90s.

Economic advisor to the chambers, David Kern added: "The outlook is grim, and we believe that the correction period is likely to be longer and nastier than anticipated"

He said businesses were currently in a "lose-lose" situation and cautioned the Monetary Policy Committee against increasing rates. He suggested it consider an early interest rate cut and government alleviate "acute business concerns over new taxes and regulation".

Commercial property prices have been hit hard by the credit crunch, which began when US borrowers defaulted on mortgage payments.

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