British economy facing ‘serious risk’ of recession: survey

LONDON, July 8, 2008 (AFP) – Britain’s economy, buckling under the credit crunch and a slowing property market, faces a “serious risk” of recession as firms face soaring costs and falling orders, according to a survey published Tuesday. The British Chambers of Commerce, which represents the country’s business interests around the world, made the claim in a quarterly economic survey that polled almost 5,000 large and small businesses.

In the second quarter of 2008, companies working in the services sector reported “alarming” falls in orders, which sank to the lowest levels since 1990, according to the BCC.

Confidence among service companies was also at the lowest point since 1990, undermined by the soaring cost of energy and raw materials.

“The second quarter results signal a menacing deterioration in UK prospects,” said BCC economic adviser David Kern.

“We are now facing serious risks of recession.”

The definition of a recession is when an economy faces contraction for two or more quarters in a row.

British businesses are facing the prospect of sky-high energy bills after crude oil prices hit record highs near 147 dollars per barrel last week.

At the same time, the ongoing worldwide squeeze on credit