Cut rates to avoid recession, BCC states
A recession coupled with millions of job cuts is imminent if interest rates are not reduced, the British Chambers of Commerce (BCC) has warned.
In its quarterly economic forecast, the body called for the rates to be cut as soon as possible because "the longer the MPC waits before cutting rates, the bigger the danger that the economic situation would deteriorate".
According to the BCC, some 250,000-300,000 people in the UK may face job cuts over the next three years, which may push unemployment to nearly two million people.
BCC director general David Frost said: "While a marked slowdown in activity is likely over the next 18 months, even if interest rates are cut when inflation peaks, the correct policy decisions are still needed to ward off the threats of a serious and prolonged recession."
The body also warned that even if rates are cut, a "marked slowdown in UK activity is highly likely over the next 18 months".
The Bank of England this month declined to raise or lower the rates, leaving them at 5% for the fourth month running.
In its quarterly economic forecast, the body called for the rates to be cut as soon as possible because "the longer the MPC waits before cutting rates, the bigger the danger that the economic situation would deteriorate".
According to the BCC, some 250,000-300,000 people in the UK may face job cuts over the next three years, which may push unemployment to nearly two million people.
BCC director general David Frost said: "While a marked slowdown in activity is likely over the next 18 months, even if interest rates are cut when inflation peaks, the correct policy decisions are still needed to ward off the threats of a serious and prolonged recession."
The body also warned that even if rates are cut, a "marked slowdown in UK activity is highly likely over the next 18 months".
The Bank of England this month declined to raise or lower the rates, leaving them at 5% for the fourth month running.
