Bank fixed on inflation amid recession talk

By Matt Falloon LONDON (Reuters) - Businesses delivered fresh evidence on Tuesday that the economy risks sliding into its first recession since the early 1990s, reporting a sharply deteriorating climate across the country. But inflationary pressure is also escalating, making it hard for the Bank of England to justify lowering borrowing costs for some time to come unless hard evidence comes through that the economy is diving into a prolonged period of contraction. The British Chambers of Commerce, joining many lobby groups now amplifying their regular calls for lower interest rates, said the business sector was on the verge of a recession and unemployment could rise by as much as 300,000 by the end of 2009. Its second quarter survey showed domestic conditions in the services sector at their weakest since the last time the... [read full story]