This is dispite the fact that intrest rate is now at its lowest rats in decades. Plummeting business at home has not been eased by the UK export market. All export balances have shown a marked fall, indicating that big dips in the value of sterling have failed to benefit UK exports.

The British Retail Consortium figures on sales from the High Street and online said that like-for-like sales in December were down 3.3% on a year ago while total sales shrank 1.4%. This is despite the government cut in value added tax (VAT), which took effect in December.

Less activity requires less staff. National recruitment levels in manufacturing are at their lowest levels since 1994, the report revealed, and fewer people were recruited into the service sector in the last three months of 2008 than since 1993, prompting a description of the current labour market as "dire".

Businesses do not expect the situation to get better any time soon. The BCC found an "alarming collapse in confidence" in turnover and profititability, with company chiefs fearing economic recovery will not be quick.

This made for the worst December since the survey began in 1995. Some High Street retailers, including Sainsbury's and Greggs, have been reporting strong Christmas trading - suggesting that the economic picture is not yet entirely bleak. But food retailers were almost the only sector to show growth, the BRC said, amid what it described as "truly awful numbers". "Non-food retailers had a torrid December despite a blizzard of promotions and deals, which would have hit margins," the BRC's director general Stephen Robertson said. "Many hard-pressed customers couldn't be seduced into spending."
Earlier, supermarket giant Tesco reported a 2.5% increase in like-for-like sales in the key Christmas period.

Commenting on the survey, and on the news of job cuts at JCB, shadow chief secretary to the Treasury, Philip Hammond, said: "This shocking news underlines the true scale of Gordon Brown's recession and the extent of the challenge that faces the next government in rebuilding Britain's economy.

"It is now imperative that the government acts to implement the Conservatives' proposed national loans guarantee scheme. Unless we get credit flowing again, more businesses will fail and more jobs will be lost".

The survey's authors also call for "a further fiscal stimulus and quantitative monetary easing", to supplement the cut in interest rates it successfully predicted would be necessary early in 2009.

The BCC's chief economist David Kern said that he now expected the UK economy to shrink by up to 2.4% in 2009, rather than the 2.2% he had earlier forecast.
"One must say that unfortunately in terms of GDP, this recession is worse than in the 1990s," he said.

Quantitative monetary easing, essentially a modern means of printing money, has been described by many experts as a "high-risk strategy" riddled with economic, practical and political problems, but it has not been ruled out by the Bank of England.

The suggestion that investment in factories and machinery was at record lows was particularly worrying, said Ross Walker, chief UK economist at Royal Bank of Scotland. This indicated that private sector firms would see their capacity for recovery hindered when the UK came out of economic crisis, he said.