03 April 2012

UK Economy Improving, But Growth Still Slow

The UK economy has shown a few signs of improvement in the first three months of this year, the British Chambers of Commerce (BCC) has said.

The BCC's new Quarterly Economic Survey (QES) released today shows encouraging results for Q1 2012, with most balances recording increases on the last quarter.

QES, comprising almost 8,000 responses from businesses across the UK, shows a welcome improvement on the results of Q4 2011 which pointed towards stagflation.

But the UK economy "is still facing huge challenges and the recovery is much too slow", the BCC said.

In a statement they said: "While the results are more encouraging than the previous quarter, they show that growth is still too weak, with the balances still below those seen in 2007 before the recession. Many manufacturing balances are now at a satisfactory level, but the service sector balances are sluggish."

However the group expects a economic growth of 0.3% in the first quarter of 2012, which would mean the UK would avoid a technical recession - defined as two consecutive quarters of contraction.

Commenting on the results, John Longworth, Director General of the BCC, said: "It’s encouraging to see that businesses are feeling more confident at the start of 2012 than they were at the end of 2011. But that underlines the need to support and foster growth and investment by companies to ensure that the increases we have seen in the first quarter continue.

"The UK economy is still facing huge challenges and the recovery is much too slow. The UK has the potential to recover, but to achieve that the government has to set businesses free to grow."

(LB/GK)