So we are back in recession and can confirm the ‘double-dip’ – well technically we can anyway. But should we really give this apparently depressing news anything more than a passing grimace as we get on with our job. If you look back over the last few months, GDP has been up a bit and down a bit. There is no doubt that we face some major challenges, not least where some of the property debt might come from to replace that which has to be renegotiated over the next 2-3 years, but the majority of business are getting a bit fed up with being in recession. They are keeping their heads down and just getting on with life.
The British Chamber of Commerce summed up the position succinctly in its press release which I quote below.
“The latest ONS data shows a fall in GDP of 0.2% in the first quarter of 2012, pushing the economy into technical recession. The figure is disappointing, and paints an unduly pessimistic picture of the state of the economy. Many commentators will question the accuracy of the data, particularly as it is based on only 40% of the information used for these estimates. As well as large falls in the construction sector, the estimate by the ONS that service sector output rose by only 0.1% on the quarter will be seen as too low by most analysts.
“Business surveys, including the BCC’s Quarterly Economic Survey, have shown a more positive picture, and we believe these give a more accurate indication of the underlying trends in the economy. We think it is likely that the preliminary estimate will be revised upwards when more information is available. For the time being, the main priority is to minimise any possible damage to business confidence. These figures are at odds with the experiences of many UK businesses, which continue to operate with guarded optimism.
“But it is clear that economic growth in the UK remains much too low. We need to see a reallocation of priorities within Plan A that will bolster business growth. That means reducing regulation, encouraging exports and improving infrastructure. While the government must persevere with plans to reduce the deficit despite these figures, it must introduce more measures to empower businesses to drive recovery.”
It would be a tragedy if we allowed the recent news to dent the vital confidence which allows business to invest in the future, because it is that investment which will drive the economy into more sustained growth.
Chris Haworth
Head of Commercial Division
Commercial, Cambridge
T: 0207 016 0729The British Chamber of Commerce summed up the position succinctly in its press release which I quote below.
“The latest ONS data shows a fall in GDP of 0.2% in the first quarter of 2012, pushing the economy into technical recession. The figure is disappointing, and paints an unduly pessimistic picture of the state of the economy. Many commentators will question the accuracy of the data, particularly as it is based on only 40% of the information used for these estimates. As well as large falls in the construction sector, the estimate by the ONS that service sector output rose by only 0.1% on the quarter will be seen as too low by most analysts.
“Business surveys, including the BCC’s Quarterly Economic Survey, have shown a more positive picture, and we believe these give a more accurate indication of the underlying trends in the economy. We think it is likely that the preliminary estimate will be revised upwards when more information is available. For the time being, the main priority is to minimise any possible damage to business confidence. These figures are at odds with the experiences of many UK businesses, which continue to operate with guarded optimism.
“But it is clear that economic growth in the UK remains much too low. We need to see a reallocation of priorities within Plan A that will bolster business growth. That means reducing regulation, encouraging exports and improving infrastructure. While the government must persevere with plans to reduce the deficit despite these figures, it must introduce more measures to empower businesses to drive recovery.”
It would be a tragedy if we allowed the recent news to dent the vital confidence which allows business to invest in the future, because it is that investment which will drive the economy into more sustained growth.
Chris Haworth
Head of Commercial Division
Commercial, Cambridge
E: chris.haworth@carterjonas.co.uk
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