Figures suggest continued UK growth - Economy - News - Moneyfacts


Figures suggest continued UK growth

Figures suggest continued UK growth

Category: Economy

Updated: 06/07/2010
First Published: 06/07/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The UK economy saw further growth in the second quarter of 2010, building on improvements seen in the first three months of the year, figures suggest.

Key indicators on business conditions from the British Chambers of Commerce (BCC) show that employment expectations, investment plans, export orders and domestic sales all made gains between April and June.

The economic data, collected from some 5,600 businesses across the UK, comes just two days before the Bank of England's Monetary Policy Committee (MPC) announces its interest rate decision for July.

The measure is expected to be frozen at the historic low of 0.5%, as it has been since March 2009.

The slight fall in inflation has lessened the chance of a rise, although one member of the MPC voted to increase the base rate of interest to 0.75% at last month's meeting.

Progress in the manufacturing sector was particularly prevalent in the BCC's figures, with domestic and export sales both increasing significantly over the second quarter.

Employment in the sector also increased, as did expectations that the trend of further jobs in manufacturing will continue.

Despite the encouraging signs, the BCC has warned that underlying weaknesses remain in the economy, leaving the UK at risk of relapsing into recession.

"On the whole these results are positive, especially in manufacturing, and they should offer encouragement that the UK's recovery remains on the right track," commented David Frost, director general of the BCC.

"We still have concerns about sluggish growth in the service sector, which emphasises why the Government must continue to promote the best possible business environment, in order to help companies invest and grow.

"Furthermore, with around 80% of manufacturers reporting that they are under pressure to increase prices, there is potentially a big issue bubbling under the surface.

"With very austere times ahead, no one should kid themselves into thinking that the UK's economic recovery is totally secure. There will need to be an unwavering focus on ensuring business is able to deliver growth, create jobs, and drive a lasting recovery.

"Interest rates will have to stay low for longer, burdensome new employment red tape must be blocked, and we will have to generate growth across all regions of the country."

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