MercoPress. South Atlantic News Agency

UK Chamber of Commerce fears considerable slowdown in the economy

Survey of 5600 businesses showed the steepest slowdown was in the services sector

The UK economy slowed considerably in the three months to the end of September but is not set to fall back into recession, according to the latest British Chambers of Commerce’s Quarterly Economic Survey.

The survey of 5600 businesses showed the steepest slowdown was in the services sector, which accounts for around three quarters of the British economy. The survey found all key service sector indicators, such as employment expectations and investment, slowed in the quarter.

The BCC echoed comments from other industry groups saying the outlook is set to the tough as government cutbacks start to bite. It said 'forceful action' must be taken by the government and the Bank of England's Monetary Policy Committee to ensure that growth sustained in the months and years ahead.

The BCC called on the UK rate-setting body to spend another £50 billion before the end of the year to buy assets and stimulate the economy and said 'reducing threats of a double-dip recession must be the main policy priority.'

David Frost, director general of the BCC, said: 'Businesses accept the government’s austerity measures. But now it’s time to shift the national debate from cuts to what needs to be done to grow the UK economy.'

Frost said that while the private sector is expected to help compensate for the reduction in government spending the government must play its part by supporting capital investment in crucial infrastructure projects.

'Businesses must be given the freedom to create jobs and wealth, exporters must be supported more actively, and the burden of red tape on employers should be reduced or scrapped wherever possible,' he said.

On Monday a business survey by Travelex found that nearly two thirds of export-led businesses think government spending cuts and tax hikes will have a negative impact on British industry over the long-term.

David Sear, global managing director at Travelex Global Business Payments, also warned that the UK’s impressive rate of growth seen in the first half of the year will not be sustained over the second half of 2010.

'This climate will make it extremely difficult for exporters to continue driving the recovery,' Sear said.