The third quarter survey, which is based on responses from over 5,000 businesses, has shown that domestic balances of sales and orders have moved deeper into negative territory, export balances have plummeted and confidence balances in turnover and profitability have dropped.
There has been a dip in recruitment across all sectors and firms are also investing less in plants and machinery.
The BCC says the UK economy is under immense pressure for the second quarter in a row. The BCC believes that if the Government and the Monetary Policy Committee act immediately to return confidence to UK businesses, a major recession can be avoided.
It is calling for a 0.5 per cent cut in interest rates at this week’s MPC meeting.
BCC director-general David Frost says: “The Government needs to say that business taxes will be cut.
“The Bank of England need to cut interest rates immediately and politicians need to get behind our businesses in these challenging times.”
BCC economic adviser David Kern says: “Overall, the alarming Q3 results point to worsening dangers of major economic downturn and rising unemployment.
“The results support the view that a UK recession has started and the downturn is getting worse.”
He calls on the Government to put in place a framework for dealing with financial institutions in difficulty rather than the current “piecemeal” approach.