HSBC said it expects companies to experience more pain in the short term, but says that the UK economy is likely to avoid a recession long-term.

In its July commentary on the state of the UK economy, HSBC's chief economist Dennis Turner said "activity this year has weakened significantly" and "all the recent trends have been negative".

Nevertheless, he expects that as belt-tightening by the Monetary Policy Committee (MPC) and the effects of policy changes make their presence felt over the next 18 months they "should help get the economy back on track in a gradual and very measured way".

Yet the BPIF said its latest research showed printing companies were more pessimistic than ever.

"Hopes of weathering the storm have been cruelly dashed," said Andrew Brown, director of corporate affairs for the BPIF.

"The big problems are rising costs in paper, consumables, energy and labour, with more increases forecast in the coming months."

And while HSBC's report acknowledges that many commentators have called for interest rate rises to combat inflation, the BPIF argued that this would be bad news for printers.

"For rates to go up at this point in time would be extremely unhelpful," said Brown.

However, it's not all doom and gloom, as the BPIF believes that the credit crunch has had minimal impact on the print industry.

"The good news is that the credit crunch doesn't appear to have affected printers when it comes to accessing finance," said Brown.

However, he also sees the trend of consolidation in the sector continuing as companies look for ways to help to stay afloat in the choppy economic waters.

"Consolidation will continue apace and for many companies it might be the best survival strategy," he said. "All businesses need to plan whether they are going to buy, are going to sell, or are going to merge."