By Daniel Hunter

John Longworth, Director General of the British Chambers of Commerce (BCC), has said that avoiding recession will underpin confidence but growth remains too weak.

Official figures have shown that the economy grew by 0.3% in the opening quarter of 2013, meaning there was no triple dip recession.

“The fact that the UK economy avoided negative growth is encouraging and will boost confidence. As our latest economic survey shows, it is the services sector that is the main component of recent growth," Longworth said.

"More must be done to support construction, which is why we have consistently advocated more house building and immediate action to maintain our roads. While the government could claim this as a minor win, it means little when looking at the bigger economic picture. Growth is still unacceptably weak, and will remain so without radical measures to get the economy moving.

“While we still believe that the government should stick to its current fiscal reduction plan, there is a need for a more promising growth strategy. We know that businesses are determined and ambitious, and want to drive growth in the face of significant economic headwinds, but they can’t do this alone. The government must consider a significant shift in priorities to boost growth within the existing spending envelope, by allocating more current spending towards capital investment over the next few years.”

David Kern, Chief Economist at the BCC, added: “The economy returning to positive growth is not surprising, but welcome nonetheless. We have repeatedly said that talk of a new recession is unwarranted, and our recent quarterly survey also signalled that the economy was in positive territory in the first quarter of this year.

"The figures also highlight the disparity between growth in the service sector and continued falls in manufacturing and construction in particular, which remain under pressure. While services output is now above its pre-recession levels from 2008, both construction and manufacturing are still lower.

“Economic growth however remains too weak and the economy as a whole is still below its pre-recession levels. But the avoidance of recession will underpin confidence and will make it easier for the government, and for the MPC, to consider future policy moves in a calmer atmosphere. The main priority remains combining a realistic deficit cutting programme with policies that make it possible for the economy to achieve sustainable growth.”

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