You are here > Home > News
Shock rise in GDP boosts UK firms, but economic fears remain
General News |
26/07/2010
Latest gross domestic product figures appear to have provided some cheer for businesses in the UK, with better than expected growth for the second quarter of 2010.
The Office for National Statistics (ONS) has reported a 1.1 per cent economic expansion for the three months between April and June, which would amount to the single-best quarterly performance in four years.
Although the figures are only preliminary at present, hopes are high that the beginnings of full-scale private sector resurgence are being witnessed.
With the ONS twice revising its estimate for the final quarter of 2009 upwards, initially from 0.1 per cent growth to 0.3 per cent, and then to 0.4 per cent, it is possible that the Q2 GDP rise may yet prove to have been even more dramatic.
Commenting on the latest growth figures, Ian McCafferty, chief economic adviser at the Confederation of British Industry, said a broad-based pickup in economic activity had been witnessed.
"The second quarter will have been boosted by a sharp turn in the inventory cycle as firms have taken action to rebuild stocks, as well as strong growth in government expenditure," he noted.
However, businesses and jobseekers have been warned about getting too far ahead of themselves, in light of the current cuts being made in the public sector.
The Recruitment and Employment Confederation has repeatedly warned of the potential effects of the government's austerity measures on public employment rates, and fears have been raised that spending reductions could have a damaging impact upon consumer confidence.
Indeed, Mr McCafferty claimed that economic growth is likely to fade during the second half of 2010, and remain more modest in 2011.
So while the ONS statistics represent excellent news for the short-term outlook, the joy is tempered by lingering doubts about the ability of the UK to remain on a path to recovery.
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
