The BCC’s quarterly economic survey showed concerning results for Q4 2011 pointing to a period of stagnation in early 2012. The survey of more than 6,000 businesses also suggested that the economy had significantly weakened.
The BCC said that its results did not indicate a recession and were still better than those seen in the worst phase of the last downturn that began in 2008.
However it also said that there was a cause for concern and the improvements in 2010 and early 2011 had largely been cancelled out.
John Longworth, director-general of the BCC, said: “A new recession is not a foregone conclusion. However action is needed urgently to tackle short-term stagnation and a lack of business confidence damaged by the ongoing eurozone crisis.”
David Kern, chief economist at the BCC said: “The results point to a worsening in the economic situation, with signs that the UK recovery is stalling.”
“A fall in employment expectations points to risks of rising unemployment over the next year. We are predicting an increase in the UK jobless total to 2.77m by the end of 2012. Recession is still avoidable but risks of a setback have increased.
“With confidence falling, every effort must be made to avert recession. We expect the Bank of England’s Monetary Policy Committee to announce a £50 billion increase in the quantitative easing programme to £325 billion, early in 2012.
“But QE will not achieve its full potential in supporting growth unless supplemented by the early introduction of a sizable and effective credit-easing programme.”
