You are here > Home > News
Continue with deficit-reduction plan, govt urged
General News |
30/08/2011
The government must continue with its efforts to reduce the public deficit, the British Chambers of Commerce has claimed.
According to the lobby organisation, the Con-Lib coalition should ignore criticism over spending cuts and focus on restoring the public finances to health.
David Kern, chief economist at the BCC, was commenting after the Office for National Statistics published growth figures for the second quarter of the year.
Gross domestic product increased by just 0.2 per cent between April and June 2011, up 0.7 per cent on the year, while manufacturing fell 0.5 per cent on the quarter.
The services sector performed slightly better, seeing 0.5 per cent growth during Q2 and a rise of 1.2 per cent on an annual basis.
Mr Kern commented that the figures were "broadly as expected", confirming that the economy grew at a slow pace during Q2.
"While special factors, such as the royal wedding, partly account for the weak growth, the overall pace of expansion in the economy is disappointing," he said.
"The decline in manufacturing in the quarter is a concern, with an initial estimate of 0.3 per cent which has been revised to a larger decline of 0.5 per cent."
Mr Kern warned that difficult times lie ahead for the UK economy, however he expressed the view that there is "no need for undue pessimism".
"Economic growth remains in positive territory and other nations face the same challenges. For example, Germany grew by only 0.1 per cent in the second quarter while the French economy was stagnant," he explained.
Mr Kern urged the government to commit to its current policies, but make "every effort" to avoid an economic setback.
"The Bank of England should maintain low interest rates for an extended period and consider increasing the quantitative easing programme if there are further signs of weakness," he added.
The government can play its part by exploring more policies to help boost growth, such as reducing regulatory burdens which prevent businesses from creating jobs and wealth, Mr Kern stated.
Posted by Jon Aspinell
------------------------------------------------------------------------
Accountancy Recruitment Agency - Transparent Recruitment Fees Since 1999 - 12.5% Fee / 3 Month, 100% Rebate.
Sign up to our e-newsletter service to receive our headline news directly to your inbox
