Big challenges facing economy, despite end of recession
Tuesday, 26 Jan 2010
Chambers of Commerce have welcomed the techinical end to the recession but are warning that the economy still faces major challenges.
Commenting on the preliminary GDP figures for the fourth quarter 2009, published on 26 January 2010 by the ONS, David Frost, Director General of the British Chambers of Commerce, said:
“This is good news, but clearly growth is anaemic, and it certainly means that the economy is far from being out of the woods.
“It is essential that the government demonstrates an unwavering determination to support wealth-creating companies in 2010. Additional business taxes must be avoided, and the 1% increase to employers’ National Insurance contributions, planned for 2011, should be scrapped.
”Unless the private sector is given the freedom to create jobs and wealth, the UK’s economic recovery will be slower than it should be, and we will face the serious risk of a double-dip recession.”
David Kern, Chief Economist at the BCC, added:
“These figures are disappointing and well below most analysts’ expectations. But, for the second quarter in a row, the GDP figures confirm the more realistic assessment signalled in our Quarterly Economic Survey, which clearly indicated that any recovery will face serious obstacles.
“The main aim now must be to ensure that the modest recovery consolidates and slowly gathers momentum. It is critical for both the government and the Monetary Policy Committee to pursue policies that make it possible for business to invest and export. Regulatory burdens must be removed wherever possible, and access to finance improved. A double-dip recession must be avoided at all costs.”
Nick Pontone, Director of Policy at Yorkshire & Humber Chambers of Commerce told the Yorkshire Post:
"The fact that the economy has started growing again is welcome news but shouldn't disguise the major risks facing businesses across Yorkshire. The technical end of recession is simply one step on the road to recovery."
"Cashflow remains very tight and investment is only picking up slowly, both of which point to a fragile recovery. Getting bank lending moving again is key to sustaining growth."
"Public spending and quantatitive easing will be tapered off over the next year, and business growth must drive the economy. The Government must avoid hampering firms with any new business taxes and regulations, especially on jobs."