Source : The Business Times, August 19, 2008
(LONDON) An influential body which represents British business says there is a 'distinct possibility' of the country facing recession in the next six or nine months, according to a report published on Sunday.
In its quarterly economic forecast, the British Chambers of Commerce (BCC) said that while a major downturn was unlikely, a cut in interest rates was necessary to counter the threat of serious problems.
Its comments came the week after Bank of England governor Mervyn King said Britain faced an increased risk of recession, with economic growth set to slow further and inflation expected to spike.
'Our quarterly economic forecast highlights a significant worsening in UK economic prospects,' said David Kern, the BCC's economic adviser. 'There is now a distinct possibility of technical recession.' He added that unemployment would climb by up to 300,000 in the next 2-3 years. It would 'likely' reach nearly two million, he said, not ruling out a rise above that.
'Our view is that the threats to growth are more serious and more immediate than the risks of higher inflation,' Mr Kern added. 'The UK economy urgently needs an interest rate cut to counter threats of recession.' - AFP
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