Insolvency Experts

UK on brink of recession - The Age 9-7-08 

BRITAIN is in serious danger of heading into recession as the credit crunch tightens its hold, according to a survey of businesses across the country.

An increase in companies reporting fewer orders, more job cuts and less investment is the latest indication that the economy is suffering from the effects of the global credit crunch and the steep rise in the price of fuel, food and other raw materials.

Companies in the service sector have seen "alarming" declines in the past three months, with those reporting lower orders outnumbering those recording rises for the first time since 1990, the British Chambers of Commerce's latest quarterly economic survey of 5000 companies says.

It says that if these trends continue, the business sector is only three months away from technical recession.

Government figures show manufacturing production in May dropped unexpectedly 0.5% from the previous month and was down 0.8% on this time last year. The wider measure of industrial production, which includes output from utilities and mining, posted an even bigger decline of 0.8% in May.

British Chambers of Commerce head David Frost said: "These results show a real risk of recession in the coming months. This is obviously deeply worrying, not just for business but for the consumer too, with both manufacturing and services reporting negative results."

A separate survey, by REC/KPMG, showed the number of people placed in permanent jobs fell again last month, while vacancies for full-time staff dropped for the first time in five years.