The UK is already in a worsening recession, and the Government and Treasury must act to prevent further deterioration, according to the British Chamber of Commerce.
In its quarterly economic survey, based on 5000 responses from businesses of all sizes and sectors, the body warned the third quarter’s results were “exceptionally bad”, with almost all of the national balances worsening, with many now in negative territory. Technically the UK is not yet in recession – defined as two consecutive quarters of negative economic growth. But the BCC described the survey results as “exceptionally bad” and said the economy was under “immense pressure” for the second quarter in a row. It also said the jobless total was expected to increase within two years.
Confidence had collapsed in both the manufacturing and service industries, according to the survey. The BCC represents small and medium sized companies, and argues that a recession has already begun.
The Bank of England must act fast and cut interest rates this week or British business and the UK economy are set for very serious times.
The figures from the BCC are further compounded by The Chartered Institute of Purchasing and Supply’s purchasing managers’ index which fell to 41 last month, its lowest reading since records began in 1992. Furthermore small businesses are now being put under increasing pressure by their larger customers to wait for their payments. These late payments are going to compound into further cash flow problems for British business.
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