Economy still in trouble warns BCC

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The British Chambers of Commerce (BCC) has said that despite the UK coming out of recession, there is still a long way to go to economic recovery.

Commenting on yesterday’s preliminary GDP figures, BCC director general David Frost 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.”

Richard Glover, chief executive of the Cornwall Chamber, pointed out that the BCC Quarterly Economic Survey had proved correct again.

“The results showed that things had stopped getting worse, causing many to heave a sigh of relief,” he said. “However the end of the recession is a technical measure; this amounts to hardly any growth at all compared with a year ago – when things were awful for most.

“Business confidence in Cornwall is growing but with many costs rising ahead of headline inflation there continues to be a pressure on the profitability of companies everywhere.”

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.”