Bcc: Imf Report Highlights Threats Of Recession
30 July 2008 in Chamber News
Commenting on the IMF's new global financial stability report, David Kern, Economic Adviser to the British Chambers of Commerce said: "The new IMF study confirms that the growing pressures on the international banking system could hit businesses, with dire consequences for jobs. Falling house prices could further weaken the banking sector's balance sheet. The result would be increased concerns over credit risks, leading to a dangerous cutback in bank lending. 'If this happens, individuals as well as businesses would be hit, and what is now a very unpleasant slowdown could degenerate into a nasty recession. To alleviate the threats facing the banking system, it is critical that the MPC does not increase interest rates any further. Once inflation reaches its peak in the autumn, it is important to start cutting rates.