News

October 29, 2010

Economic growth will continue next year, says BCC

The UK has weathered the worst of the recession and the economy will continue to grow in 2011, the British Chambers of Commerce (BCC) has said.

The business group made the comments following the release of the latest figures from the Office for National Statistics (ONS) on economic growth. The research found that the UK economy grew by 0.8 per cent in the third quarter of 2010 – double the rate expected – but lower than the 1.2 per cent growth in the second quarter.

“The results were better than expected in the third quarter driven by the strong manufacturing sector – particularly in construction,” said BCC spokesman, Steve Hughes. “Manufacturers have responded well to the weakness in the value of sterling and seem to be exporting more. The services sector is still very sluggish, but growing.

“We are optimistic that growth will continue in 2011,” he added. “We have weathered the worst of the recession and are in a period of relative stability, but small firms aren’t confident enough yet to invest and try and grow. They are waiting to see the impact of the Government spending cuts.”

Chancellor George Osborne said that along with the Government’s Comprehensive Spending Review, the ONS data should help underpin confidence in the UK economy.

“The ONS believe that the underlying growth in the third quarter was broadly similar to the strong second quarter,” he said. “This gives me confidence that although global economic conditions remain choppy, a steady recovery is underway.”

However, Confederation of British Industry chief economic adviser, Ian McCafferty, urged caution about the economic forecast for 2011. “The timing of the VAT rise in the New Year will help to bolster spending over the fourth quarter, but this is also likely to slow growth more noticeably through winter and early next year,” he said.