Britain is at ‘serious risk’ of a recession, according to a survey of almost 5,000 businesses.

The British Chambers of Commerce’s (BCC) quarterly economic report found that the credit crunch is having a seriously detrimental impact on UK firms, with rising costs forcing cashflow into negative territory.

Services enterprises, which include restaurants, gyms and tour operators, have been particularly hard hit, the BCC reported. Sales and orders, job expectations and confidence in this sector have slumped to their lowest levels since the recession of the early 1990s.

The BCC has warned that, if current trends continue, the UK business sector is just one quarter away from a technical recession. It also claims that the correction period will be longer and worse than anticipated.

David Frost, BCC Director General, said: ‘These results show a real risk of recession in the coming months. This is obviously deeply worrying, not just for business but for the consumer too, with both manufacturing and services reporting negative results.

‘The temptation for the Government will be to raise business taxes in the next PBR because the exchequer is running out of money. This would be a catastrophe.’

He added: ‘I am sending Alistair Darling and Gordon Brown a strong message from the businesses I meet every day up and down the country: to put more pressure on business would not only restrict growth and hit the consumer hard, it would further crush what our economy is based on – confidence’.