BCC states that interest rates must fall

Officials from the British Chambers of Commerce have stated that interest rates in the UK need to fall in order to help deal with the prospect of recession. Recently a number of industry groups have said that the UK is now likely to slide into recession by the end of this year.

The base rate has remained unchanged at 5% since April of this year, with the Monetary Policy Committee having to deal with soaring inflation levels as well as the slowing economy. Whilst recession is now said to be likely by the end of the year officials state that the nation can still avoid the type of major recession that hit the UK in the late 1980s and early 1990s.

One official from the BCC said: ‘The longer the Monetary Policy Committee waits before cutting rates, the bigger the danger that the economic situation could deteriorate. The level of UK unemployment is likely to increase to nearly 300,000 over the next few years, reaching almost two million.’

He added: ‘The main drivers of the UK slowdown will be a very sharp deceleration in consumer spending growth as households tighten their belts amid soaring bills and falling house prices.’