The UK is already in a recession, and immediate action from the Government and the Bank of England is the only thing that's going to prevent it from getting worse, according to the British Chambers of Commerce.
Each quarter of 2008 has given a worse depiction than the last of the economic outlook, the business group's research found, compiled from information received from more than 5,000 UK businesses of varying size and sector.
Many of the UK's business are in "negative territory", and the domestic economy is coming under increasing pressure, with results showing that the UK is in a "worsening recession", the group said.
To prevent it turning into a major recession, BCC
director general, David Frost, believes that "The Government needs to say that business taxes will be cut. The Bank of England need to cut interest rates immediately and politicians need to get behind our businesses in these challenging times. More than just growth makers – businesses are critical to our local communities."
The news that the UK is in a recession has not been unexpected, and follows a bad day for the stock market, with the FTSE 100 experiencing it's worst fall in one day yesterday, tumbling 391.1 points, or 7.85 per cent, and wiping £93.4billion off the value of the index's shares.
It was the banks that bore the brunt of the losses, with shares in Royal Bank of Scotland and HBOS both falling by 20 per cent, while Barclays lost 15 per cent off its share value.
Shares plummeted around the globe amid fears that the world's leaders were not getting a grip on the worsening credit and confidence crises. The Government is under pressure to offer a more comprehensive guarantee for savings accounts
to stop people from moving their money around and exacerbating the instability in the markets.
The Chancellor Alistair Darling said that he would do "whatever it takes" to restore stability, but made no mention of specific measures, leaving many thinking that he's a man without a plan.
One possible solution being considered by the Government would see it taking a £50billion stake in the UK's banks, a part-nationalisation scheme that would allow banks the liquidity to start lending again. This route could mean the taxpayer will hold a stake in the country's biggest banks, such as Barclays, RBS, Lloyds TSB and HBOS.
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