the Business Forum and
the Economic Partnership
in Brighton & Hove
Homepage    BCRP Intranet    Funding    Events    Knowledgebase    Links    About us     Contact us
Key projects
Crime
reduction
 


Inward
investment
information
 


Licensee
Forum
 

Workforce development 

Transport
 

Business &
climate
change

Property &
Development sites

Business
Improvement
Districts

Housing
 

Strategy
 

Consultation opportunities
 

Brighton & Hove Business Forum
8-11 Pavilion Buildings, Brighton, BN1 1EE
Tel: 01273 735442
Email: info@brighton
business.co.uk

© Brighton & Hove
Business Forum

News - 13 July 2008
It doesn't have to be like this

Reasons to be cheerful- recession is not inevitable

The British Chambers of Commerce (BCC) warns that alarming results highlight serious risks of UK recession but it is not too late to avert it. However, time is running out and the Government needs to act quickly.

The BCC (Q2) Quarterly Economic Survey received a record response with nearly 5000 businesses, large and small, taking part. The results are ominous and show serious risk of recession in the UK, with some results hitting historically low levels in the manufacturing and service sectors.

If these trends continue, the UK business sector will be in recession in three months time. In particular, the critical UK domestic balances for home sales and orders recorded negative growth in the last three months in both manufacturing and services.

Other key results from the survey show:

  • Cashflow in negative territory and at record lows, showing the credit crunch and rising costs have now hit business
  • All the confidence balances fell sharply in both manufacturing and services, a very worrying development
  • Service sector hit harder than manufacturing, seeing even bigger declines overall
  • Key service sector balances are at their lowest level since the recession of the early nineties including: home sales and orders, employment expectations, and confidence balances

The BCC believes that the correction period is likely to be longer and worse than anticipated

Commenting on the Q2 2008 Quarterly Economic Survey, Director General of the British Chambers of Commerce David Frost, said, “These results show a real risk of recession in the coming months. This is obviously deeply worrying, not just for business but for the consumer too, with both manufacturing and services reporting negative results. The temptation for the Government will be to raise business taxes in the next PBR because the exchequer is running out of money. This would be a catastrophe.

“I am sending Alistair Darling and Gordon Brown a strong message from the businesses I meet every day up and down the country: to put more pressure on business would not only restrict growth and hit the consumer hard, it would further crush what our economy is based on – confidence.”

David Kern, Economic Adviser to the British Chambers of Commerce, said, “The Q2 results signal a menacing deterioration in UK prospects. We are now facing serious risks of recession. For the first time in many years, the vital results for domestic sales and orders, and for cashflow, have moved into negative territory for both manufacturing and services. The outlook is grim, and we believe that the correction period is likely to be longer and nastier than anticipated.

"Some key results, mostly in services, are at historically low levels not seen since the recession of the early-1990s. The threats facing the economy will be exacerbated by plunging confidence across both sectors. Overall, the Q2 results point to growing risks of outright falls in UK output in at least one or two quarters.

"Intention to raise prices remains high, rising to a new peak in manufacturing and easing only slightly in services. Businesses are in a lose-lose situation.

Falling demand and the squeeze on consumer disposable incomes will limit how far prices can be increased.

"The MPC faces difficult choices. But immediate threats to growth are more alarming than dangers of higher inflation. The sharp deterioration in the cash flow balances of both sectors to record lows heightens threats of a serious credit crunch. An increase in rates at the present time would weaken further the banking sector, and would endanger the smooth flow of finance to business.

"A major recession can still be avoided, but forceful measures are needed to improve confidence. The MPC must resist misguided calls for higher interest rates. Indeed, if wage pressures remain muted, the option of early interest rate cuts must be considered. On its part, the Government must alleviate acute business concerns over new taxes and regulations, and must stand ready to support vulnerable small businesses."


Read related items on:
Recession
British Chamber of Commerce
Frost. David
Kern, David


Browse our business Knowledgebase or search by keyword


Headlines

16 May 2018
Can you help us help rough sleepers? Search for a venue to provide shelter
15 May 2018
New Research Reveals Cost of Opening A Business in Brighton: £6,000 11 May 2018
Tech firm SaleCycle to open new office in Brighton, creating 30+ new jobs 4 May 2018
Get involved - National Numeracy Day This 16 May 1 May 2018
BUSINESS IMPROVEMENT DISTRICT INDUSTRY CELEBRATES 300 BIDS 1 May 2018
Barclays' High Growth & Entrepreneurs Awards 2018 launch to celebrate start-up leaders in the UK 30 April 2018
Barclays launches major drive to help SMEs tackle Cymbercrime 24 April 2018
An evening with Chris Fox, Lib Dem Peer 24 April 2018
"A triumph of innovation" 13 April 2018
Brighton city Centre Vacancy Rates continue to buck national trend 12 April 2018
The Ivy in the Lanes Set to open 2 May 2018 11 April 2018
Free Dr Bike Service Returns 20 March 2018
Brighton named most entrepreneurial city AND second best for student happiness according to Fresh Student Living 19 March 2018
A Meeting with Chris Fox, Lib Dem Peer - Why Business Matters 14 March 2018
Better Business for All Event with BEIS 7 March 2018
Brighton celebrates women in tech as Spring Forward festival returns for a fourth year 6 March 2018
Six months of success for BTN BikeShare 2 March 2018
Sustainability in Action masterclasses for Sussex businesses 2 March 2018
Doing Business in China comes to Brighton 1 March 2018
Brighton & Hove Chamber of Commerce presents: Protecting your brand- a guide for fast growth businesses 1 March 2018
Long haul passengers boost local economy and jobs, according to new Gatwick report on the 'Visitor Economy' 28 February 2018
Save time reporting crime 27 February 2018
Warren Morgan Resigns from Brighton & Hove City Council 23 February 2018
Brighton Technology Company, Paxton Ranks in Sunday Times 100 Best Companies to Work For 23 February 2018
Greater Brighton's Commercial Property Database 22 February 2018
SE-ASSIST - Launch of Loan Capital in Greater Brighton 19 February 2018
House Price update Q4 2017 19 February 2018
What would you do in a crisis? 19 February 2018
The investment journey for high growth entrepreneurs 9 February 2018
Make Change Count 2018 - helping rough sleepers in Brighton & Hove 8 February 2018
Brighton Technology Company Paxton Announces Recipients of New Scholarship Programmein Association with the University of Brighton 8 February 2018
Cyber London Accelerator Invites Summer 2018 Entries 8 February 2018
Innovate UK Launches Strand 2 Emerging and Enabling Technologies Sector Competition 8 February 2018
Success In Sussex As Food And Drink Heroes Crowned Winners 8 February 2018
UK Games Fund - Fourth Round Open to Applications 8 February 2018
Innovate UK & Prince's Trust Launch Young Innovators' Programme 6 February 2018
Brighton & Hove Food Partnership launches 'Kit Out The Kitchen' crowdfunding campaign 2 February 2018
Brighton & Hove Council and Crest Nicholson win £15m government funding to kickstart King Alfred project 1 February 2018
Could a Utilise Plus Programme grant help you? 1 February 2018
Shoreham Port Facilitates Huge Operation