UK business owners are set for a tough year ahead, with a recent survey showing that business confidence has dropped to its lowest level since 2003.
Over 40% of business owners expect to have to make redundancies during the coming year, but surprisingly few are expecting a full blown recession. Redundancies will be made in order for businesses to remain lean through an expected tough few months, while the dust settles from the US credit collapse. While most see the US recession as inevitable, the UK is thought to be in much better shape to cope with the general slow down in the economy.
It is true that the American problem may be far deeper seated than anything that the UK will have to face, but the British Chamber of Commerce has none the less called on the Bank of England to further reduce the interest rate in a bid to maintain some growth through what is likely to be a difficult time for business and the economy.
BCC economic advisor David Kern has said “Threats to growth are much more acute now than risks of higher inflation, and we would have welcomed a bold UK move to cut rates to 5%.”
Reasons for the decline in confidence are attributed to the credit crunch, possible recession in the USA and a slowing UK property market
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