Business leaders issue economic warning

News Article - Monday, May 12, 2008

filed under: Business

The British Chambers of Commerce (BCC) has predicted that the current economic downturn could worsen before it starts to pick up.

According to the business leaders' organisation, the current outlook for the UK economy is gloomy and immediate action is needed from the Bank of England to prevent further problems.

The BCC is advising businesses in Britain to prepare for the worst in 2008, as the credit crunch continues to affect financial markets.

Consumer spending could remain weak until the end of next year and undergo a "very sharp deceleration", the BCC quarterly economic forecast suggests.

Many businesses will be put under intense pressure by the worsening economic climate and the BCC predicts that GDP growth will remain below trend until the end of 2009, at around 1.7 per cent this year and 1.6 per cent next year.

David Kern, economic adviser to the BCC, stated: "British businesses are facing two difficult years. The monetary policy committee and the government must adopt pro-active policy measures aimed at countering the threats to growth."

Accounting software can help companies to manage their finances more effectively during a period of slow economic growth.

The decision by the Bank of England to maintain interest rates at five per cent rather than respond calls for a rate cut has come under fire from business leaders.

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