The UK is on the brink of recession. That's the welcome news this Monday morning from yet another important report on the state of the nation's economy.
Ernst & Young's Item Club warns that the UK will sink into a recession unless the Bank of England takes action. It foresees the high street and the housing market following the manufacturing sector into recession.
"The strength of the pound against the euro has meant that British manufacturers are struggling to compete in Europe," says the Item Club's Professor Peter Spencer. The Bank of England should intervene in the currency markets to sell the pound and buy the euro, bridging the chasm between the two, he says.
Prof Spencer argues that downturn in the manufacturing sector will next hit the level of employment and this in turn will knock down consumer sentiment and the housing market. "Manufacturing is already in recession and this rot will spread if it is not stopped soon."
The think-tank, which bases its predictions on the Treasury's own economic model, predicts that the UK's economic growth will fall dramatically this year to levels not seen since the early 1990s.
What is certain is that the debate about whether or when the UK will go into downturn is heating up - and it is getting closer to the hospitality and leisure sector. At present, the two-speed nature of the UK economy, low inflation and continuing consumer confidence has tended to shelter this sector.
But only last week the Colliers CRE Midsummer Retail Report warned that the High Street branded bars boom could be at an end, after a much lower take-up of space than in previous years. Saturation may have been reached on the High Street.
Is this just the effect of over supply or that operators are beginning to become more cautious about long term prospects? Is the sector starting to plan for a downturn?
Clear indicators would be for companies to start concentrating even more on their core businesses and brands, putting a brake on new concept launches, though not necessarily new openings of existing brands, and selling off poor performers. Margins will also come under the spotlight.
This is certainly happening. Whether because of growing pessimism or of a more general need in a competitive market to reorganise probably doesn't matter much, but leaner and meaner times look like they are on the way back.
The relatively good news is that pubs and casual dining restaurants have the capacity to make the most of tighter times. The top end of market is not the place to be. Investors may even start to see the best-run businesses as an attractive shelter from the pain in the rest of the economy?
Ernst & Young's Item Club warns that the UK will sink into a recession unless the Bank of England takes action. It foresees the high street and the housing market following the manufacturing sector into recession.
"The strength of the pound against the euro has meant that British manufacturers are struggling to compete in Europe," says the Item Club's Professor Peter Spencer. The Bank of England should intervene in the currency markets to sell the pound and buy the euro, bridging the chasm between the two, he says.
Prof Spencer argues that downturn in the manufacturing sector will next hit the level of employment and this in turn will knock down consumer sentiment and the housing market. "Manufacturing is already in recession and this rot will spread if it is not stopped soon."
The think-tank, which bases its predictions on the Treasury's own economic model, predicts that the UK's economic growth will fall dramatically this year to levels not seen since the early 1990s.
What is certain is that the debate about whether or when the UK will go into downturn is heating up - and it is getting closer to the hospitality and leisure sector. At present, the two-speed nature of the UK economy, low inflation and continuing consumer confidence has tended to shelter this sector.
But only last week the Colliers CRE Midsummer Retail Report warned that the High Street branded bars boom could be at an end, after a much lower take-up of space than in previous years. Saturation may have been reached on the High Street.
Is this just the effect of over supply or that operators are beginning to become more cautious about long term prospects? Is the sector starting to plan for a downturn?
Clear indicators would be for companies to start concentrating even more on their core businesses and brands, putting a brake on new concept launches, though not necessarily new openings of existing brands, and selling off poor performers. Margins will also come under the spotlight.
This is certainly happening. Whether because of growing pessimism or of a more general need in a competitive market to reorganise probably doesn't matter much, but leaner and meaner times look like they are on the way back.
The relatively good news is that pubs and casual dining restaurants have the capacity to make the most of tighter times. The top end of market is not the place to be. Investors may even start to see the best-run businesses as an attractive shelter from the pain in the rest of the economy?
