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UK unemployment to soar

There’s more doom and gloom this week as British business leaders forecast the loss of around 300,000 jobs over the next two to three years. The British Chambers of Commerce (BCC) also predicts the UK economy will enter recession within the coming year.

In its latest quarterly economic forecast, the BCC said Britain was heading into a “technical” recession of two or more quarters of declining output over the next six or nine months. But a major recession similar to the downturn seen in the early 1990s was unlikely, the organisation said.

The main reasons for the slump will be a “very sharp” slowdown in consumer spending growth as households tighten their belts amid soaring bills and falling house prices, the BCC said.

David Kern, the BCC’s economic adviser, said: “Our view is that the threats to growth are more serious and more immediate than the risks of higher inflation. The UK economy urgently needs an interest rate cut to counter threats of recession.”

The report also warned that if the global slowdown got even worse, the MPC decided not to cut interest rates and the Government did not take corrective action, the UK’s economic plight could become even worse than it had forecast.

This was posted in Bdaily's Members' News section by Ruth Mitchell .