Slump ‘deepening at an alarming pace’

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THE British Chambers of Commerce yesterday published its Fourth Quarter Economic Survey of nearly 6,000 businesses.

It highlights what it called ‘a frightening deterioration’ in the UK economic situation.

It had to conclude that there were ‘no positive features in the Q4 results. Domestic demand is plunging, exports are falling, and confidence is plummeting. All the critical national balances have worsened in Q4, for both manufacturing and services, and all are in negative territory.’

It added: ‘It is clear that the UK economy is facing a very serious recession, and the downturn is deepening at an alarming pace. The collapse in all the Q4 confidence balances to record lows is particularly ominous.’

The BCC survey concluded that ‘The manufacturing sector’s balances for home sales and orders, employment expectations, investment, confidence, and cash-flow have plunged to record lows in Q4.

‘In the service sector, all the key balances, without exception, are at record lows in Q4. 

‘Q4 domestic balances are particularly disturbing. Home sales and orders, in both manufacturing and services, are in negative territory for all firm sizes and for all UK regions.’

BCC surmises that ‘The economy is clearly facing exceptional threats. The marked fall in all Q4 export balances, and their move into negative territory, indicates that big falls in the value of sterling have not benefited UK exports, (News Line emphasis) because of the adverse effects of the sharp global downturn.

David Frost, Director-General of the British Chambers of Commerce, could only say: ‘A clearly defined National Recovery Plan will need to be rolled out as soon as possible, involving all politicians.’

A national recovery plan is clearly what they have not got, and cannot get under capitalism.

For recovery you need the nationalisation of the banks and the major industries and a plan worked out to develop the economy according to people’s needs. What is needed for recovery is to get rid of capitalism and its market.

BCC’s Chief Economist, David Kern’s remedy was for ‘Interest rates to be reduced to almost zero early in 2009. . . . New and more far-reaching measures like a further fiscal stimulus and quantitative monetary easing should be introduced.’

Salvation lies in no interest rates, more lending to banks, and a massive printing of paper notes, the road to absolute capitalist disaster – the UK’s own Weimar.

He adds: ‘If the risk of deflation worsens, businesses will face new threats, and the authorities must be ready to introduce emergency policies.

‘The smooth flow of finance to businesses must be sustained at all costs, and business taxes will have to be cut.’

This means further bail- outs of the bosses to be financed by huge cuts in public sector pay and state pensions, and a big rise in VAT. The final solution is, after organising state bankruptcy, to completely pauperise the working class and the middle class.

Wage cuts and job cuts are already being brought in and this is besides the vast increases in food, gas and electricity prices.

Workers at Southampton’s Ford factory are facing a cut in earnings after the firm said it was replacing its two-shift working day with a single shift.

The factory, which makes Transit vans, will also close for 20 days over the next three months.

The announcement came as 1,100 staff returned to work after a Christmas break which was extended due to a downturn in vehicle sales.

At the same time, the UK’s goods trade gap with the rest of the world reached record levels in November. It reached £8.33bn. The trade gap with non-European nations also hit a record at £5.30bn.

These figures confirmed that the much weaker sterling is not boosting demand for UK exports though it is boosting the price of all imports.

The only way to avoid the threatening catastrophe is to nationalise the banks and major industries to bring in a socialist planned economy.