BCC reports ‘frightening’ speed and rate of economic downturn

British employers are facing a “frightening” downturn, despite government initiatives to combat unemployment.

The Fourth Quarter Economic Survey by the British Chambers of Commerce reported the biggest contraction in 19 years in the manufacturing and services industries during the final quarter of last year.

Employment expectations and business confidence have also fallen to record lows.

David Frost, director-general of the British Chambers of Commerce, said ‘urgent and forceful corrective measures could avert a prolonged recession’.

“These are truly awful results, with the scale and speed of the economic decline happening at an unprecedented rate,” said Frost. “A clearly-defined national recovery plan will need to be rolled out as soon as possible, involving all politicians.”

Meanwhile, several companies have announced significant job losses:

  • Logistics firm Wincanton will make up to 1,000 employees redundant following a merger with Culina
  • Construction machinery manufacturer JCB is to cut 684 jobs in response to the credit crunch
  • Newcastle Production, which makes frozen foods, collapsed, putting 420 jobs in danger
  • Sofa company Land of Leather has called in administrators.

On Monday, Gordon Brown unveiled a £500m plan to tackle unemployment by promising £2,500 for employers who take on people who have been out of work for more than six months.

John Cridland, the CBI deputy-director, welcomed the move, but called for more to be done to minimise job losses.

“These measures to help the unemployed are welcome and important, but we also need initiatives that will stop people being made unemployed in the first place,” he said.

“The best way to protect jobs and the economy is to target the credit crunch. If we do not get credit flowing through the economy again, good businesses will fail, causing more job losses and lasting damage to the economy,” he added.

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