26/07/11

  • GDP in Q2 up 0.2% on the quarter, 0.7% on the year
  • Manufacturing fell 0.3% on the quarter, but rose 2.3% on the year
  • Services rose 0.5% on the quarter, 1.2% on the year

Commenting on the preliminary GDP figures for the second quarter of 2011 published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“These figures were slightly worse than our forecast of 0.3 percent, but they reassure us that the UK recovery is still on course, and fears of a double dip recession are not justified. Special factors, such as the Royal Wedding and temporary falls in oil and gas output, account for the weak growth in the second quarter.

“Based on these figures, we believe the government is right to persevere with its deficit cutting measures aimed at stabilising our public finances. There is no need to consider changes in fiscal policy or talk about the need for a Plan B. However, we mustn’t be complacent. Growth is weak and this is due to both a lack of demand and inadequate supply potential.

“To sustain demand, we think the Bank of England should persevere with low interest rates and consider an increase in the QE programme. We believe that increasing the productive potential of the economy is more important to our economic success than simply boosting consumption. This means implementing growth-enhancing policies and removing regulatory burdens that hamper businesses in their efforts to create jobs and export.”

Ends

Notes to editors:

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people.

Media contacts:

Liz Larvin
Tel: 020 7654 5813 / 07825746812
Email: l.larvin@britishchambers.org.uk

Lisa Morrison
Tel: 020 7654 5812 / 07717682221
Email: l.morrison@britishchambers.org.uk