Recession Prediction From The British Chambers Of Commerce

A new statement from The British Chambers of Commerce makes waves as the first major business group to predict a full recession in Britain's economic future. This went along with an estimate that 300,000 workers would be out of a job by 2011. This grim estimate would mean 2 million unemployed people at the peak, a number matching the heights before Labour gained majority.

The official statement predicts that the economy will continue to fall in the two quarters left before March. This shrinkage would begin a technical recession. To match this position, predictions for economic growth were cut to 1.3% for this year and then 1.1 % for the following year. They had originally been 1.7% and 1.6%, respectively.

Their concerns certainly aren't unfounded. The Bank of England is already entrenched in a fight with out of control inflation which reached 4.4% in last month's analysis. This was the highest it has been in 16 years.

The BCC still believes that this isn't the biggest problem facing the economy though. Their focus is more on the long term effects of falling growth as opposed to the relatively temperamental effects of inflation. They believe that further rate cuts are the only way to prevent more losses in the future.

For the general picture, unemployment numbers rose by 20,100 in July to make a total of 1.67 million. This poor job market only exacerbates the issues with mortgages, while inflation in food and energy costs increased the average family's expenses by £700 each year, with the poorest losing £7 a week just to buy basic necessities.

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