'Sweeping' rate cut needed, say businesses

Date: 5th January 2009

A major cut in the Bank of England's base rate is needed if the British economy is to avoid a lengthy recession.

That is according to the British Chambers of Commerce (BCC), which has claimed that the Bank's monetary policy committee (MPC) must reduce its lending rate by one per cent later this week.

Such a move would leave the base rate at one per cent, a level which the BCC believes could help kick-start the economy.

David Kern, chief economist at the chambers, stated: "The rapid worsening in the economic situation and growing fears over rising unemployment reinforce the need for the MPC to continue with aggressive rate cuts."

He added that if the Bank's authorities were to "adopt forceful measures" and slash the base rate to one per cent, a "prolonged depression" could be avoided.

In other news, small businesses - including sole traders and partnerships - have until January 31st to submit a self-assessment tax return, which must now be done online.