The UK economy is just months away from going into recession, a new survey warns.
According to research by the British Chambers of Commerce (BCC), a fall in domestic sales and orders, combined with decreased confidence indicate the UK is at "real risk" of a period of economic decline.
David Frost, director-general of the BCC, said: "This is obviously deeply worrying, not just for business but for the consumer too, with both manufacturing and services reporting negative results."
A decision by the government to increase business taxes because it is running out of money "would be a catastrophe", he added.
The report also found that cashflow is at record lows across several sectors, something it says indicates how the credit crunch and rising costs have hit business.
However, Richard Lambert, director-general of the Confederation of British Industry, believes that it is likely recession will be avoided.
Speaking last month, he said that one of the biggest threats to the economy is talking "ourselves into unnecessary trouble".
