BCC: Economic growth to slow in Q4

| January 11, 2011 | 0 Comments

The British Chambers of Commerce (BCC) has today warned of a fragile economic recovery in the UK with growth expected to slow in the final quarter of 2010.

There has been suggestions that economic growth will be severely hampered because of the Government’s massive spending cuts.

There is a possibility that the Bank of England’s Monetary Policy Committee (MPC) may look to stimulate growth by injecting further funds into the economy via its quantitative easing scheme.

The BCC expects economic growth to be between 0.4%-0.5% in the October-December period - slower than the 0.7% expansion reported in the third quarter.

However, the slowdown in growth is also attributed to a weak service sector.

Last week, figures showed growth in the UK’s closely-watched service sector contracted in December.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit purchasing managers’ index (PMI) fell to 49.7 in December, down from the reading of 53.0 in November.

Not only did the sector endure its first fall in activity since April 2009, it was far lower than analysts expectations of a flat reading of 53.

The drop was attributed to the bad weather during the month.

However, the BCC highlighted that the manufacturing sector is growing very strongly and is being driven by exports.

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