The results are ominous and show serious risk of recession in the UK, with some results hitting historically low levels in the manufacturing and service sectors.

If these trends continue, the UK business sector is now only one quarter away from technical recession. In particular, the critical UK domestic balances for home sales and orders recorded negative growth in the last three months in both manufacturing and services.

In the South East house building has been put on hold, jobs shed by developers and it is estimated at least over 50,000 could go nationally before the pain eases. Wimpey and Barratt have already laid off one sixth of their workforce. Sub contractors are struggling to get paid and this all knocks on to households' spending power.

The origins of the illness points back to the US economy according to economist Dr Ian Shepherdson who told an audience of the Chartered Institute of Housing: "Evidence from the USA suggests that unrealistic expectations for home ownership are one of the major causes of instability in the housing market and a major contributor to the current economic downturn. It is vital the lessons from the USA are reflected in UK government home ownership policy."

He also forecasted a gloomy outlook for the UK economy with the credit crunch likely to continue well into 2010.

Chamber chairman Bob Russell said: "The Thames Gateway is not immune from the sudden collapse of confidence in the economy.

"It has been widely reported that John Lewis at Bluewater has seen a dramatic downturn in sales since the early spring. They are not alone. Furniture, DIY, carpet retailers, along with builders, estate agencies etc; throughout the region are seeing dramatic falls in business.

"New car, van and truck sales are reported to be down by as much as 20 per cent this year and to add insult to injury, fuel costs including tax are being raised on a daily basis.

"Our government seems to have been caught completely unawares by the global downturn and is ill prepared to offer leadership. It is said that Kent has so far escaped the general downturn in house prices, but householders are struggling to sell in the current climate and month by month they see their energy and food bills rising.

I believe the best way to deal with this problem is to start to reduce taxation for business and individuals so that the economy can ease back to steady growth."    
 
The key findings of the BCC survey see cashflow in negative territory and at record lows showing the credit crunch and rising costs have now hit business. All the confidence balances fell sharply in manufacturing and services, a very worrying development.

The service sector has been hit harder than manufacturing with even bigger declines overall. Key service sector balances are at their lowest level since the recession of the early 90's, as are home sales and orders and employment expectations. The BCC believes the correction period is likely to be longer and worse than anticipated

BCC economic adviser David Kern, Economic said: "The survey results signal a menacing deterioration in UK prospects. We are now facing serious risks of recession. For the first time in many years the vital results for domestic sales and orders, and for cashflow, have moved into negative territory for both manufacturing and services. The outlook is grim and we believe that the correction period is likely to be longer and nastier than anticipated.

"A major recession can still be avoided, but forceful measures are needed to improve confidence. The Monetary Policy Committee must resist misguided calls for higher interest rates. Indeed, if wage pressures remain muted the option of early interest rate cuts must be considered. On its part, the Government must alleviate acute business concerns over new taxes and regulations, and must stand ready to support vulnerable small businesses."