The British Chambers of Commerce (BCC) have warned that recovery is likely to be much slower than had previously been anticipated.
David Kern, the BCC’s chief economist, commented:
“The UK’s economic prospects remain uncertain, our recovery is fragile and risks of a relapse are high. Threats of a double-dip recession are greater in the near future than the dangers of higher inflation.”
Mr Kern added that gross domestic product (GDP) growth is likely to average at just under 2% per annum over the next 4 years or so. He went on to say that after taking this into consideration it is vital to ensure that wealth-creating firms have enough capacity to respond to an upturn in demand once recovery begins to strengthen.
The Director for the BCC, David Frost has echoed what many small business groups have been saying over the past few months and that the government must use the forthcoming Budget to “encourage a business-led recovery.” He added that should the government fail to do so then the recovery is likely to take longer to gain the momentum it requires.
The British Prime Minister, Gordon Brown, has stated the the Budget announcement is to be held on 24th March and that it will include necessary pay-cuts for senior public sector employees. However, Mr Brown also warned that spending cuts should not be rushed into as withdrawing support could result in the UK dipping back into a recession.
“While we have come through the worst of this dreadful storm, the waters are still choppy. There are still real risks to the recovery.”