You are here: Home - Investing - Experienced Investor - News -

BCC claim slow Q1 growth

Written by:
British businesses in both the manufacturing and services industry experienced a slowdown in the first quarter of this year, according to research released today by the British Chambers of Commerce (BCC).

Earlier this week, the CBI projected UK GDP growth of 0.7 per cent in Q1 – however, the BCC findings point instead to flagging sales and export fortunes, with the net balance of manufacturers reporting increased domestic orders down from 38 per cent in Q4 last year to 27 per cent in the most recent quarter. Services sector businesses reported a reduction from 33 per cent to 28 per cent in the same period. Investment intentions and hiring were also stagnant. Services slowdown particularly concerns the BCC, as the sector represents three-quarters of UK output.

“Our findings a reminder that the UK still faces obstacles on the path to sustainable, long-term growth,” comments John Longworth, BCC director general.

“Unless support for exports and business investment is placed at the heart of any future government, consumption and government spending will continue to drive an economic recovery that is unbalanced and unsustainable.”

“Our message to the politicians is simple; national interest must come before short-term political point scoring,” Longworth concludes. “Given that all parties agree that the UK needs to strengthen its trade performance, and that we need to encourage our businesses to invest more, these should be issues that unite – rather than divide – the parties over the weeks ahead.”

David Kern, BCC chief economist, said that UK recovery “remains unbalanced” with growth “still too reliant on consumer spending, and a current account deficit that is unsustainable.”

“While a healthy consumer sector is vital for the economy’s wellbeing, much greater efforts are needed to increase the contributions of exports and capital investment to Britain’s growth.”

The release of the BCC report follows news that the BoE Financial Policy Committee is extremely concerned about the UK current account deficit, which the Committee believes would result in markets deserting Britain in the event of an economic downturn.

“The weakness of mortgage demand, and zero inflation, will make it even more likely that the MPC will leave interest rates at current levels,” says Simon Wells, an HSBC economist. “If housing demand is slumping in an environment of falling mortgage rates, the MPC may worry about what would happen if rates rose.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week