Britain's economy went into steep decline at the end of last year when consumers tightened their belts, businesses slashed jobs and the housing market ground to a virtual standstill, a trio of surveys show today.
The figures suggest the economy has entered its deepest recession since at least the 1980s and will add urgency to discussions on fresh policy initiatives to ease the pain of the credit squeeze.
A survey by the British Retail Consortium showed retail sales fell last month at their fastest pace for a month of December since records began 14 years ago.
Furniture retailer Land of Leather this week joined a growing list of household names to have disappeared from the high street and analysts expect more to go out of business as the recession takes hold.
A survey from the Royal Institute of Chartered Surveyors, meanwhile, showed the pace of decline in British house prices eased slightly in December, but sales hit a record low and the proportion of unsold houses rose to its highest level since 1992.
British Prime Minister Gordon Brown unveiled a £500m sterling plan yesterday to stop the recession creating an army of long-term unemployed. Further measures on bank lending are expected later this week.
Britain's economy has been particularly hard hit in recent months as banks around the world have reined in lending to repair overextended balance sheets.
The British Chambers of Commerce called urged the government to take 'additional forceful corrective measures' as it warned that businesses were facing their toughest conditions in more than two decades.
It said its quarterly survey of almost 6,000 firms showed a 'frightening deterioration' towards the end of last year as sales, orders, investment, employment expectations, cashflow and confidence deteriorated at the fastest pace since the series began in 1989.
'These are truly awful results with the scale and speed of the economic decline happening at an unprecedented rate,' said David Frost, Director General of the British Chambers of Commerce. 'Since October, things have really fallen off a cliff,' he added.
The BCC was one of the first groups to forecast a recession last year and the depth and breath of its survey makes it a closely watched barometer for the state of the economy as a whole.
The Bank of England has already slashed interest rates to an historic low of 1.5% from 5% last October. Analysts expect rates will fall close to zero in the coming months, shifting attention to what can be done once its conventional monetary ammunition has been used up.
