The manufacturing and services sectors have suffered a decline in sales over the past three months.

The UK is facing “serious risk of recession”, a survey by the British Chambers of Commerce (BCC) has highlighted.

According to the responses of 5,000 small, medium and large businesses, cashflow is at a record low and confidence has fallen sharply in both the manufacturing and services sectors.

If the trends continue, the UK business sector is “now only one quarter [a year] away from technical recession”, the BCC has warned.

The survey also revealed that domestic sales in the manufacturing and services sectors have slowed in the last three months – with the service industry suffering the biggest decline.

Director General of the BCC, David Frost, described the results as “deeply worrying” for both businesses and consumers and said any temptation by the Government to raise business taxes “would be a catastrophe.”

He said: “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 BCC, added: “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… A major recession can still be avoided, but forceful measures are needed to improve confidence.” 

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

By Natasha Piscitelli