And although the pound has begun to fall on the belief that interest rates may have peaked, Mr Owen believes that it could take some time to fall to its former levels.

He told BBC News online that investors will still be attracted by British interest rates which are relatively higher than in continental European countries - a situation he predicts is likely to continue.

"These periods of currency overvaluation in the past have actually lasted for a long time," he said.

In other words: even if the Bank of England does decide to cut interest rates, manufacturers' problems will not be solved overnight.

And the Bank of England may not cut rates for sometime.

Steven Bell, chief economist at Deutsche Bank sympathises with John Edmonds but predicts there will be no recession.

John Edmonds, general secretary of the influential General Municipal and Boilermakers union, has launched an attack on the composition of the Bank of England's Monetary Policy Committee (MPC) which sets interest rates. He believes the economists on the MPC have ignored the plight of manufacturers.

But the MPC's sole goal is to keep inflation at the government's proclaimed target of 2.5%. With private sector wages still rising by more than 6% and Gordon Brown moving to loosen the government's purse strings by announcing a sharp rise in spending on schools and hospitals over the next few years it is hardly the MPC's fault that interest rates may have to stay put.

With manufacturers in deep trouble most economists agree that the UK economy is heading for a slowdown.

The danger of recession, officially defined as two successive quarters of falling Gross Domestic Output, is obvious.

Prediction 1: hard landing

Mr Owen of Dresdner Kleinwort Benson said that "it is inevitable that the economy will slow and slow very sharply. And certainly we would describe this as corporate hard landing with rising bankruptcies and increasing unemployment."

He believes the more the labour market tightens, and wage inflation holds up, the harder corporate profits will be squeezed. And when companies cut back, he expects them to cut back very savagely.

Prediction 2: all to be played for

In contrast, Adam Cole, UK economist at HSBC, believes that it is "touch and go" whether the British economy can avoid a recession.

He is predicting that Britain's annual economic growth rate will fall from its current 2.6% this year to 1.5% in 1999. "This implies that in the second half of this year and early next year, there will be a slowdown to pretty much zero growth at some point overall in the economy and big significant falls in manufacturing from here," Mr Cole said.

Prediction 3: soft landing

But the gathering storm clouds could have a silver lining. Although the UK may technically fall into recession over the next 12 months, most pundits believe that the economic slowdown will not be as fierce or as long lived as those before it.

Steven Bell, chief economist at Deutsche Bank said: "We are hoping for a soft landing rather than a hard landing."

And Mr Cole chimes in: "There is every chance that we see a couple of quarters of negative growth. But the recession will not be nearly as severe as the early 1980s and 1990s where there were long periods of sustained falls in output."

Companies have more cash and assets on their balance sheets than just before the last recession which will help insulate them against the hard times to come.

Threats

A further downturn in Asia or a shock decision by the Bank of England to raise British interest rates could yet plunge the economy into a recession it will struggle to recover from.

But at the moment it appears we are heading for a slowdown, albeit a sharp one, rather than a recession.

Boom is not about to turn to bust.