The BCC has called for a cut in interest rates to boost confidence amongst UK businesses.

The UK is already in a recession and the downturn is getting worse, the British Chambers of Commerce (BCC) warned today (7 October).

According to a BCC survey of 5,000 businesses of all sizes, recruitment has dropped and confidence has collapsed in all sectors.

To boost confidence, the organisation has called for a half-point cut in interest rates at the Bank of England’s Monetary Policy Committee (MPC) meeting this week.

Interest rates must be cut to 4% as a minimum over the next four months, it said.

The BCC believes that a major recession can be avoided if the Government and the MPC act immediately to return confidence to the UK.

“A moderate recession is very probably unavoidable,” it said.

BCC Director-General, David Frost, said in a statement: “We are clearly in a very difficult economic period but it is important that we retain a sense of proportion. Many parts of the business community continue to perform well.

“Confidence is critical and it is vital that businesses are shown leadership. The BCC will be showing such leadership in the coming months.

“The Government needs to say that business taxes will be cut. The Bank of England need to cut interest rates immediately and politicians need to get behind our businesses in these challenging times.”

The BCC report comes just a day after the FTSE 100 suffered its worst one-day drop in history. The UK’s top shares index fell 7.9% or 391.1 points to close at 4,589.2 points, wiping £93.4 billion off the value of shares.

For more information, visit: www.britishchambers.org.uk

By Natasha Piscitelli