News Article - 24 May 2012
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Britain has a one-in-three chance of entering a recession over the next couple of years, a new report warns.

Investment bank Lehman Brothers warns that the chance of a recession in Britain over the next two years currently stands at 35 per cent, while house prices could drop by as much as eight per cent by the end of 2008.

The company forecasts that the Bank of England will cut interest rates from the current 5.25 per cent to four per cent in a bid to boost the UK economy and reduce the risk of recession.

According to the Downward Spiral report on the UK economy, as quoted by the BBC: "It has become clear that the banking system - and hence the credit creation process - is under considerable strain."

Small businesses are advised to carry out a health check, look into streamlining processes and control costs carefully, as the economic climate worsens in the wake of the US credit crunch, rising living costs and slowing growth.

The Bank of England has cut its own growth forecast for the year and small and medium-sized enterprises (SMEs) are advised to invest in accounting software in order to maintain business performance and productivity in adverse economic conditions.

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