BCC survey reveals fragile economic recovery

| July 11, 2011 | 0 Comments

A quarterly survey by the British Chambers of Commerce (BCC) revealed that the UK economy was “fragile”.

The BCC’s survey for the three months to the end of June showed a slow recovery and estimates that the economy grew by 0.3% in the period – slower than the 0.5% growth in the first quarter.

Commenting on the findings, BCC chief economist David Kern, said he believes the Government needs to introduce “more growth-enhancing policies that will enable private sector firms to increase productivity and drive the recovery forward.”

Meanwhile, the group warned of a premature rise in interest rates. Many business groups have called on the Bank of England to lift interest rates to fight stubbornly high inflation but the central Bank believes the economy is too fragile for such measures at this stage.

The BCC’s report is taken from 6,600 responses from companies throughout the UK.

In the meantime, a separate survey from accountancy firm BDO revealed a fall in business confidence in the manufacturing sector.

The firm’s Business Trends optimism index for the manufacturing sector dived to 90.1 last month, from May’s reading of 97.5 in May.

BDO said the fall in confidence was of real concern – particularly as the sector has been one of the bright spots of the UK economy.

Meanwhile, BDO’s output index also fell last month, while the wider business optimism index - which includes other sectors as well as manufacturing - also declined.

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