But good news from the BBC...
BBC Thursday, 23 August, 2001, 17:13 GMT 18:13 UK UK 'to avoid recession'
The CBI expects manufacturing upturn before year end
Britain will avoid a full-blown recession, according to the Confederation of British Industry (CBI).
The greatest problem is that we may talk ourselves into a recession
Richard Jeffrey
Charterhouse Economics
The CBI says the manufacturing sector will start to recover by the end of the year.
And this news seems to be backed up by an exclusive survey of the UK's top companies by the BBC's Radio Five Live.
Only a handful of the UK's biggest 100 companies plan to make redundancies over the next twelve months, indicating that business confidence could be healthier than previously thought.
Talking it up
Radio Five Live surveyed the companies which make up the FTSE 100's share index, and obtained a response from 85 of these firms.
Thirty companies planned to keep staffing levels the same, while 23 firms said they planned to increase their workforce.
Company plans for the year ahead
Increase workforce
23 out of 85
Workforce unchanged
30 out of 85
Decrease workforce
13 out of 85
Just 13 out of the 85 indicated that redundancies may be on the cards.
Although the news cannot really be described as upbeat, it is far from overwhelmingly gloomy.
And Richard Jeffery, chief economist at Charterhouse Economics says that the biggest problem is that a recession could become a self-fulfilling prophesy.
"The greatest problem is that we may talk ourselves into a recession," Mr Jeffrey told the BBC.
But the larger companies could well be faring better than the smaller and medium size enterprises.
And the Federation of Small Businesses say that the number of small firms taking on new staff are outweighed by those planning job cuts.
A brighter picture
The CBI forecasts that GDP - the broadest indicator of economic growth - will grow by 2% this year and by 2.5% in 2002.
Fears of a recession are overdone and we are expecting a recovery next year
Sudhir Junankar, CBI
"Fears of a recession are overdone and we are expecting a recovery next year," Sudhir Junankar told the BBC.
But while the overall picture looks brighter, the manufacturing sector will continue to struggle.
Britain's manufacturing sector is the only part of the UK economy officially in recession, defined by two consecutive quarters of negative growth.
After declining for the first nine months of the year, the CBI forecasts that manufacturing output will improve in the last three months of the year and grow by a modest 0.6% in 2002.
"Despite benefiting from stable oil prices and some revival in export markets, manufacturing will continue to be the key weak spot in the UK economy," said Digby Jones, CBI director general.
The CBI also called on the Bank of England to cut interest rates by another quarter point to 4.75% in order to try and help the manufacturing sector to a speedier recovery.