Recession could be "deep and severe"
Recession could be "deep and severe"
Friday 10th October 2008
Michael Saunders of Citygroup told the Investors Chronicle that the combination of consumer debt and lack of liquidity in the money markets means that the economic downturn could be particularly serious.
His comments follow the Bank of England's emergency decision to slash interest rates by 0.5 per cent along with other national banks and the government's £50 billion rescue plan to bolster Britain's banking sector.
British Chamber of Commerce (BCC) figures predict unemployment in the UK will increase by 350,000 next year and a survey of 5,000 businesses showed that confidence in the manufacturing and service sectors of the economy has deteriorated.
David Kern, economic advisor to the group, 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."
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