I thought it worthwhile sharing the message this week from the British Chambers of Commerce ahead of the Bank of England meeting to consider interest rates and the Chamber of Commerce annual conference:
The UK economy has returned to positive growth, but the recovery remains fragile as the increase in VAT and spending cuts begin to bite.
That’s the conclusion of The British Chambers of Commerce’s (BCC) latest Quarterly Economic Survey (QES), which received responses from 6,000 businesses across the UK before its release today.
The survey, which covered the first quarter of 2011, shows there has been a sharp decline in business confidence and that cashflow remains a real concern for businesses.
For manufacturing firms, the cashflow balance plunged 18 points to -4%, the worst figure since the first quarter of 2010. Services cashflow fell 10 points to -10%.
Although the statistics may have been negatively affected by the weather-related disruptions in December,the BCC believes the results show the economic climate for businesses remains uncertain.
According to David Frost, director general of the BCC, the results show that the economy faces a challenging year and that “the recovery will be choppy”, and has called on the government to help boost business confidence and encourage more firms to “export, invest and create more jobs.”
He added: “As the public sector cuts start to bite, the government must get the detail right on the measures announced in the budget to generate economic growth by helping businesses thrive.”