Threat of ‘double dip’ recession remains

Leading business group, the British Chamber of Commerce (BCC), has warned that the UK economy faces a “high risk of a relapse“.

The UK economy emerged from recession in the fourth quarter of 2009 by experiencing growth of just 0.3%.

However, all economists and reports have suggested that the recovery will be fragile, while others have expressed concern for a double-dip recession (whereby the economy goes into recession twice without having undergone a full recovery in between).

In the BCC’s latest economic forecast, it said: “The UK economic outlook will remain highly uncertain for a considerable time.”

BCC director general, David Frost, said in the report: “The recession may have technically ended, but there is no room for complacency.

“For the recovery to be sustained, it is crucial that all the political parties recognise the vital role of wealth-creating businesses in driving economic growth and job creation,” he added.

Mr Frost said economic growth will be dampened by widely-anticipated cuts in public spending.

However, the business group warned that there is a risk of a “new recession” if the Government cuts the deficit too early.

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