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BCC: UK recovery ‘yet to be secured’

Julia Rampen
Written By:
Julia Rampen

Policymakers risk the UK economic recovery stalling if they fail to address its “undue reliance” on consumer spending, the British Chambers of Commerce has said.

In the introduction to its quarterly report, BCC chief economist David Kern acknowledged the economy apppears to be growing at a solid pace.

But he continued: “The recovery is not yet secure. UK growth is still unduly reliant on consumer spending, driven by a buoyant housing market and a falling savings ratio. The very large current account deficit also poses risks.”

If the government and the Bank of England want to maintain the pace of growth, they must address the economy’s structural problems, he said: “Unless investment and net exports can make a bigger contribution to growth, there is a risk that the recovery will stall.”

In March, the Office for Budget Responsibility raised its growth forecast for the UK to 2.7% for 2014.