Save us from credit crunch; PLEA TO BANK OF ENGLAND AND CHANCELLOR:

Evening Chronicle (Newcastle, England), Oct 7, 2008

Byline: By ALAN JONES

BRITAIN is now in a recession with business confidence, profits and turnover at record lows and unemployment set to rise by up to 350,000 in the next year, says to a report out today.

An authoritative survey of 5,000 firms by the British Chambers of Commerce showed a worsening economic outlook and rising unemployment amid a collapse in confidence across all sectors of industry.

The BCC said it was clear the UK was now in a worsening recession and urged the Government and the Bank of England to take urgent action.

The Bank's Monetary Policy Committee was urged to cut interest rates by 0.5% this week, while the Gov-ernment was told it should slash business taxes.

Employment expectations among the firms polled were the worst since 1993 and the BCC warned that the jobless total was expected to increase by between 300,000 and 350,000 over the next 12 to 24 months, which would take the total to over the two million.

The survey results, for the third quarter of the year, were exceptionally bad and included worryingly weak investment plans by manufacturers and weaker exports.

David Kern, economic adviser to the BCC, said: "The results support the view that a UK recession has started and the downturn is getting worse. The domestic economy is under immense pressure.

"Without forceful and urgent cor-rective action, there is a serious danger that the recession will deepen and cause huge damage.

"The MPC must cut interest rates without delay, with a 0.5% cut on Thursday. Over the next four months, interest rates must be cut to 4%.

"The smooth flow of finance to businesses must be sustained at all costs. Any thought of early tax increases must be quashed."

BCC director general David Frost maintained that despite the economic gloom, firms were still pretty opti mistic but he urged politicians to get behind businesses to help them cope with these challenging times.

Shadow Treasury chief secretary Philip Hammond said the survey showed the banking crisis was biting.

He said the Conservatives would work with the Government to help contain the problem and protect the integrity of the banking system.