Builders' Merchants News

UK still in recession

Published:  13 October, 2009

COVENTRY: The British Chambers of Commerce warned that the economy is still 'frail'. Its latest quarterly survey casts doubt on whether the UK emerged from recession between July and September.

Although confidence among manufacturers and services companies is at its highest since the start of 2008, before the recession began, several indicators remain negative.

David Kern, the BCC's chief economist, said: "The third-quarter results support our assessment that the UK economy is on the brink of leaving recession.

"However, the improvement is not sufficiently strong to allow us to conclude without doubt that GDP has already returned to positive growth. The economy is still frail."

Official estimates are due next week on the performance of the economy in the third quarter of this year. If the economy remains in the doldrums, it will be the first time the UK has endured six successive quarters without growth.

This data also supports the view by some city analysts that house price rises in the past five months are unlikely to be sustained.

The BCC predicts a 4.3% slide for the economy this year and anaemic 1.1% growth in 2010 as a weak recovery gets under way.

The group is calling on the government to help businesses by reversing moves such as the 0.5% hike in national insurance contributions from 2011.