17/11/2008 - Group voices unemployment fears
Business leaders have warned more than one in 10 workers could face unemployment if Government bids to kick-start the economy fail.
The British Chambers of Commerce (BCC) fears unemployment could peak at 3.25 million - more than 10% of the workforce - if the measures were inadequate. It added that, even if the Government delivered with a stimulus package of up to £18 billion, public borrowing could reach £111 billion in 2009/10, posing "serious risks" for the UK.
The group's warning that the country's finances are in a "dreadful state" comes ahead of the Pre-Budget Report. It forecast that a "painful and prolonged" recession would last until late next year and urged Chancellor Alistair Darling to focus on tax cuts in his attempt to spur on the economy.
David Kern, the BCC's chief economist, said the economic climate looked to be "exceptionally difficult and threatening". He added: "If the Government's fiscal stimulus is inadequate, or lacks credibility, the UK recession will be worse. If the markets interpret the UK measures as being reckless, the pound may plummet to dangerous lows."
Mr Kern called for rate cuts to limit the threat of unemployment and urged Mr Darling to create a clear fiscal framework.
Copyright © Press Association 2008
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