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Double-dip recession can be avoided, says BCC
General News |
12/10/2011
A double-dip recession can be avoided in the UK if the government is prepared to make tough policy choices, a leading business organisation has claimed.
The British Chambers of Commerce (BCC) believes a series of pro-business measures are required to alleviate the risk of economic contraction.
Based upon Office for National Statistics figures, the economy has expanded by just 0.1 per cent over the last nine months.
Research conducted by the BCC paints an equally gloomy picture for the UK economy, with the Q3 Quarterly Economic Survey identifying a downturn in both manufacturing and services.
The body surveyed 6,700 companies from across the UK, and found that while some balances remained in positive territory, indicating growth, the pace of expansion has dropped dramatically.
According to the BCC, figures for the domestic market, exports, business confidence, cashflow, and investment in plant and machinery have weakened over the last quarter.
David Kern, chief economist at the BCC, said the survey pointed to deterioration in the economic situation, with "concerning signs of stagnation" identified.
"The disappointing Q3 balances for exports, and for investment in plant and machinery, suggest that the much-needed rebalancing of the UK economy is not yet occurring," he noted.
John Longworth, director general of the BCC, said the results of the Q3 study were "not entirely surprising".
"The survey shows the real risks facing the economy and the need for the government to act now in putting business growth at the heart of all its policies," he added.
"We can avoid a recession, but this relies on the government making some tough policy choices."
Mr Longworth said it is imperative that the government perseveres with its deficit-cutting plan, but there must be a significant reallocation of priorities within the overall spending envelope.
"We need a much greater focus on those policies that will help businesses expand, take on more staff, export and invest," he added.
"Businesses need continuous reassurance that there is a plan for fiscal stability and a clear road map which will steer us towards a strong recovery, "Mr Longworth stated.
He called on the government to recognise that business is good for Britain, and put in place measures to bolster confidence and support those companies that have the potential to grow.
"That includes a commitment to a Plan A+ for growth, with alternative paths at the ready in case of further shocks from foreign shores," Mr Longworth added.
Posted by Stephen Wilkinson
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