A tenth of the workforce will be unemployed by the second half of 2010, according to the British Chambers of Commerce (BCC).

The BCC estimates 3.2 million people will be unemployed at the peak of the recession - 600,000 more than anticipated six months ago.

The Economic Forecast from the business network group, released this morning, shows manufacturing output in the manufacturing sector will drop 9% this year. But the sector could recover if it is nurtured'.

BCC director general David Frost said: "It will be business that leads the UK out of recession. For this reason it is vital companies are given the freedom to create jobs and wealth.

The chancellor will give his Budget speech for 2009 on Wednesday 22 April.