UK ‘already in recession’

Executives from Britain's top three high street banks last night demanded that Alistair Darling, the Chancellor of the Exchequer, finalise his emergency plans for pulling the UK financial sector out of its current predicament.

Representatives of Lloyds TSB, Barclays and Royal Bank of Scotland were summoned to Number 11 to be sounded out over the plan, but ended up pleading with Darling for him to act as soon as possible with his proposal for the Government to inject new capital into the banks by buying positions in them.

Meanwhile, the British Chambers of Commerce (BCC) has warned that Britain is already in the grip of a recession. The BCC's quarterly survey of 5,000 business found that confidence has collapsed in both the service and manufacturing sectors. Britain's fragile economic situation is worsening and unemployment could rise to more than two million in the next year or two, the business group said.

Officially the UK is not in recession - defined as two consecutive quarters of negative economic growth. However the BCC - which represents small to medium-sized businesses - argues that the recession has already begun, with the economy under "immense pressure" for the second quarter in a row. The survey findings were "exceptionally bad", it added.