GORDON Brown needs to act decisively to curb a possible return to recession, warns Sussex Enterprise.

The combined Chamber of Commerce, TEC and Business Link for Sussex says the Chancellor needs to address the two-speed nature of economic growth in next week's Budget. It points out that nationally the manufacturing sector and exports are heading for recession but at the same time the service sector is experiencing rapid expansion and labour markets are tightening. Mark Froud, director of economic research at Sussex Enterprise, said: "There is a danger of repeating the mistakes of 1989. The Government and the Bank of England must find a way of slowing the growth in consumer demand, while allowing manufacturers to invest and grow. "Unless it does, there is a real danger of the Government having to slam the brakes on the economy later this year and the consequence will be a recession. "The Government and the Bank of England need to appreciate the long-term damage being done to the wealth generating parts of the economy."

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