Businesses fear recession and future tax increases

Date: 8th July 2008

Small businesses in the UK fear the country is heading for a full-blown recession and need the Bank of England and the government to act to prevent future problems, a new report has shown.

The British Chambers of Commerce (BCC) Quarterly Economic Survey showed that the manufacturing and service sectors are particularly concerned about the current economic slowdown.

In fact, the BCC said that the country could be just three months away from technical recession.

Director general of the BCC, David Frost, said that there was a current feeling that the government would look to increase business taxation in the coming months to generate more public funds. However, he said such a move would be "a catastrophe".

"To put more pressure on business would not only restrict growth and hit the consumer hard, it would further crush what our economy is based on - confidence," he explained.

Economist David Kern added: "A major recession can still be avoided, but forceful measures are needed to improve confidence.

"On its part, the government must alleviate acute business concerns over new taxes and regulations, and must stand ready to support vulnerable small businesses."