Having been one of the more upbeat forecasters since the start of the credit crunch the British Chambers of Commerce is now firmly in the pessimists camp.

In its latest economic prediction the BCC says that the next few quarters could see either zero or negative growth, forcing companies to shed between 250,000 and 300,000 jobs over the next two to three years. It is calling for an early cut in UK interest rates.

"Our view is that the threats to growth are more serious and more immediate than the risks of higher inflation," said David Kern, Economic Adviser to the BCC. "The UK economy urgently needs an interest rate cut to counter threats of recession."

"A marked slowdown in UK activity is highly likely over the next 18 months, even if interest rates are cut in line with our central forecast," he added. "But, if the MPC decides not to cut rates in the next three to six months, growth prospects would be worse than in our central scenario."

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