United Kingdom economy triple dip recession 'to be avoided' says British Chambers of Commerce

Wednesday, April 3, 2013

The United Kingdom economy will avoid a triple dip recession said the British Chambers of Commerce (BCC) in a statement yesterday reasoning that a better than expected performance in the service sector in the first quarter of 2013 has led to an increase in growth.

The BCC chief economist, David Kern said: "The survey reinforces our assessment that recent GDP figures published by the Office for National Statistics (ONS) have exaggerated the weakness of the UK economy and the volatility in output [...] If an announcement of negative growth in the first quarter is misleadingly described as a triple-dip recession, confidence will again be damaged unnecessarily."

The ONS statistics show the British economy shrank by 0.3% in the final quarter of 2012 and output remained flat throughout last year - the economy would have to grow in the first quarter of 2013 in order to avoid a recession. Later this month the ONS will publish its preliminary estimate of the first quarter GDP figures on April 25 which will indicate as to whether Britain has avoided a triple dip recession.

A survey which was released on Tuesday by Markit Economics stated that the British manufacturing sector had shrank and output was falling. They also blamed the recent bad weather of heavy snow and loss of market confidence in the UK for the fall in output.

The value of the British pound sterling has fallen resulting in an increase in exports abroad. The director general of the BCC, John Longworth said to the BBC that "the pound's helping" to increase exports. He went on to say, "There's been a major focus on helping businesses to export, rebalance the economy towards exports away from domestic. The fact that the domestic economy is flat and the Eurozone is flat in terms of trading is driving exports to the rest of the world."