British business chiefs seek path to recovery
London - Britain's business leaders gather here on Monday for an annual conference expected to focus on how companies can recover from the country's longest recession on record.
The Confederation of British Industry (CBI), the nation’s biggest employers’ body, has billed its one-day gathering ‘Routes to Recovery’.
The worst global crisis since the 1930s has hammered consumer demand, ramped up unemployment and ravaged manufacturing in Britain.
Businesses have also been blighted by the credit crunch as the struggling banking sector has tightened lending criteria, despite record low interest rates from the Bank of England.
Britain faces a general election by next June and ahead of the polls, one of the biggest headaches facing the government is how best to fix the dire state of the nation’s public finances.
British Prime Minster Gordon Brown’s Labour party is tipped to lose at the hands of David Cameron’s Conservatives, the country’s main opposition.
The CBI meanwhile, the biggest lobbying organisation for Britain’s business sector, is calling on the government to sort out ballooning debt and extend its car scrappage scheme to safeguard valuable automaking jobs.
"This time last year, the world was absolutely in the eye of the storm, unimaginable things were going on after the collapse of (US investment bank) Lehman," CBI Director-General Richard Lambert told AFP ahead of the conference.
"Just about everywhere in the world, demand for just about everything fell by about 30 percent.
"The banking system was in a state of absolute shock and we really had no idea what on earth was going to happen next."
Lambert said the economic environment had improved over the past year, despite Britain being plagued by shrinking economic growth.
"Although there are still big uncertainties and anxieties out there — particularly here in the UK compared for example with France — it is a lot better than it might have appeared 12 months ago," Lambert told AFP.
Britain’s recession, which began in the second quarter of 2008, is officially the country’s longest since records began in 1955. The economy has now contracted for six quarters in a row.
The nation is also the only major power still officially in recession after the eurozone, France, Germany, Japan and the United States all emerged from the global downturn.
In Britain meanwhile, the government and the Conservatives are at loggerheads over the level of public spending cuts and taxation hikes needed to balance the books and aid economic recovery.
"The first most important job for the next government is to set out a credible plan for getting the public finances back into shape," said Lambert.
He added: "Public borrowing here, as a share of GDP, is running at a higher rate than any other major economy apart from the United States."
The Organisation for Economic Cooperation and Development has also called for the government to outline plans to nurse the finances back to health and aid economic recovery.
Britain has borrowed 86.9 billion pounds so far in the current financial year that began in April, recent data showed.
Analysts warn that borrowing was highly likely to breach the government’s 2009/2010 target of 175 billion pounds.
Britain’s finance minister, Chancellor of the Exchequer Alistair Darling, may be forced to lift his forecast in a preliminary annual pre-budget report due on 9 December.