18th January 2008
Recession "not imminent" says BCC
The latest quarterly report from the British Chambers of Commerce (BCC) indicates that, although the slowing economy is a cause for concern, a full blown recession is not imminent.
The organisation also suggests that a "modest" further cut in interest rates would help combat the reduced service sector activity over the last three months.
Last week, the Bank of England's Monetary Policy Committee (MPC) decided to leave the Bank rate unchanged at 5.5%, having made a cut in December. The decision left many commentators predicting a rate cut for February.
However, while a further cut in interest rates could help to ease the credit squeeze affecting consumers and retailers, it could also risk driving the rate of inflation higher. Earlier this week, figures showed that the rate of inflation remained at 2.1% in December, still above the government target of 2%.
The BCC's Q4 Quarterly Economic Survey of its 4,600 members highlights how complex decision-making demands on the MPC can be.
"The latest results show the tough position that the MPC is in, as it contemplates its next move," said David Kern, economic advisor to the BCC. "Talk of recession, however, is unjustified and must be strongly resisted."
The organisation also suggests that a "modest" further cut in interest rates would help combat the reduced service sector activity over the last three months.
Last week, the Bank of England's Monetary Policy Committee (MPC) decided to leave the Bank rate unchanged at 5.5%, having made a cut in December. The decision left many commentators predicting a rate cut for February.
However, while a further cut in interest rates could help to ease the credit squeeze affecting consumers and retailers, it could also risk driving the rate of inflation higher. Earlier this week, figures showed that the rate of inflation remained at 2.1% in December, still above the government target of 2%.
The BCC's Q4 Quarterly Economic Survey of its 4,600 members highlights how complex decision-making demands on the MPC can be.
"The latest results show the tough position that the MPC is in, as it contemplates its next move," said David Kern, economic advisor to the BCC. "Talk of recession, however, is unjustified and must be strongly resisted."
- 5th January 2009 Businesses urged to make redundancies 'last resort'
- 5th January 2009 'Cut interest rate to 1%' says business group
- 2nd January 2009 Gloomier forecast from business group
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