Falling business investment heightens long-term threats to the economy

Commenting on the preliminary business investment figures for the second quarter of 2009, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“The further sharp decline in business investment signals serious threats to Britain’s long-term recovery. In the face of weak demand and mounting financial pressure, businesses have little choice but to cut investment and stock.
 
“Unless this trend can be reversed, the long-term productive capacity of the economy will be damaged, and the country will lack the necessary capital stock to sustain a recovery. This must be kept in mind when the government plans a fiscal strategy to repair the public finances. It is critical not to impair the business sector’s ability to invest and create wealth.”

Ends

Media Contact:

Sam Turvey
Tel: 020 7654 5813
Email: s.turvey@britishchambers.org.uk

Notes to Editors:

ONS: Business investment for the second quarter of 2009 is estimated to be 10.4 per cent lower than the previous quarter and 18.4 per cent lower than the same period last year.

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 business across the UK, which employ over five million people.