Comment: Markets turmoil hits home

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Today's survey by the British Chambers of Commerce is a particularly worrying perspective on the economic downturn. The BCC has members across the country and across sectors - so when it reports a sharp change of mood and a drying-up of orders in both manufacturing and services, we should take notice. It is by no means certain, as the BCC predicts, that Britain will endure a recession, defined as two successive quarters of negative growth, but the Treasury's core forecast of a two per cent expansion in the economy this year represents a triumph of hope over evidence. At the same time, food and energy price rises continue to fuel inflation, making it unlikely that the Bank of England's Monetary Policy Committee will cut interest rates to ease the impact of the credit crunch when its monthly meeting gets under way tomorrow.

That gloomy combination of factors helped prompt a further fall in share prices today: they have dropped around 20 per cent from last year's high. House prices are still sliding, bringing dramatic upsets for construction companies Taylor Wimpey, Barratt Developments and Persimmon, while Marks & Spencer's poor trading shows how the impact has reached the high street.

A Government in a stronger fiscal position would have been able to produce some confidencebuilding measures - but instead, the public finances are so weak that the BCC has sent a personal warning to the Chancellor and Prime Minister not to contemplate raising taxes on business. As civil servants today struggle to defend the £1.2 billion annual cost of benefits fraud, part of a welfare bill that will rise if unemployment and repossessions increase further, the squeeze can only get tighter. The storm clouds are darkening fast, but for the Chancellor, there is no rainy-day money.