British manufacturing industry is in worse shape than at any other time since World War II. The survey, of nearly 2,000 senior British industrialists, found that 70 percent of the companies examined expected to shed labor in the next four months. Output is at its lowest level since industrial records began in 1958, demand had fallen off sharply, and 84 percent of those surveyed said their plants were working below a satisfactory full rate of operation.
"We are now in a much more serious recession that that experienced in 1974-75 ," said Sir Terence, who until the end of September was chairman of Ford (UK). "We would have to go back to before the war to find industry in comparable difficulties," he added.
Noting "we have not touched bottom yet" and that "there is worse to come," Sir Terence attacked the government for holding the interest rate up to its current 16 percent level.
Observers here generally blame the high interest rate of drawing in foreign funds. That influx drives up the value of the pound and so increases the costs of the tremendous volume of goods Britain sells overseas. The pound is widely thought to be overvalued by 20 to 30 percent, partly because North Sea oil has made it a petrocurrency.
Despite the attacks from the normally Tory business community, however, Prime Minister Margaret Thatcher has reiterated her insistence that interest rates be kept high until the demand for borrowing falls.
Asked in Parliament by Liberal leader David Steel whether she could tell the difference between "a bracing climate and freezing to death," she refused to budge from her long-standing commitment to attack inflation through monetary policy. Her unwillingness to lower the interest rate dismays a growing number here who see unemployment, now over 2 million, as the nation's most serious problem.