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UK to avoid triple dip recession, says BCC

2013-04-02 11:16:36

The UK is set to avoid falling back into recession, according to the British Chamber of Commerce (BCC).

The BCC believes a strong performance by Britain's service industries during the first three months of the year has kept the economy growing.

The weakness of the pound has also given exports a boost, it said.

The BCC's survey of more than 7,000 firms also showed improvements in the manufacturing sector, although employment had weakened.

David Kern, BCC chief economist, said the results suggested the economy had continued to grow in the first three months of 2013.

He said this was contrary to the picture of the economy being painted by official figures.

"The survey reinforces our assessment that recent [official] gross domestic product figures have exaggerated the weakness of the UK economy and the volatility in output," he said.

"If an announcement of negative growth in the first quarter is misleadingly described as a triple-dip recession, confidence will again be damaged unnecessarily."

'Tortuous road'

The Office for National Statistics (ONS) will give preliminary estimates of GDP growth for the first quarter later this month.

Its figures show the economy shrank by 0.3% in the last three months of 2012. An economy is considered to be in recession if it contracts for two consecutive quarters.

If the UK economy does contract in the first three months of the year, it will have fallen back into recession for the third time in five years.

The BCC expects the UK economy to record "positive but subdued growth" in 2013.

John Longworth, director general of the BCC, said the survey's figures suggested a "long and tortuous road to recovery".

"These results provide a glimpse of the as-yet-distant sunlit uplands of recovery," he said.

"Businesses up and down the country are working hard to drive the economy, create jobs and export, but they cannot accelerate this process alone."

The BCC survey found that conditions for both the services and manufacturing sectors were improving, but were still much worse than before the financial crisis.

The services sector saw some of the biggest improvements, with strong domestic sales and exports.

Source: bbc.co.uk

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