By Marcus Leach
New that UK retail figures fell in August will only add to the growing fears that economic growth will continue to remain subdued.
This is the view of David Kern, Chief Economist at the British Chambers of Commerce (BCC).
“Retail sales in August were down compared with July, but better than many were expecting in light of the riots during the month," he said.
"The flat picture over the year is disappointing, but not surprising. The government’s austerity measures, combined with higher food and energy prices, continue to squeeze disposable incomes.
“Growth in the third quarter of the year will remain weak, but fears of a new recession are unjustified. The economy will face serious challenges over the coming months, as concerns over the difficult international situation continue. But there is no need for pessimism.
"The government is right to persevere with efforts to reduce the deficit, but more thought must be given to additional measures within the plan that could stimulate economic growth. Maintaining low interest rates until the third quarter of 2012 is essential given the pressures faced by businesses and consumers, and the MPC may need to consider increasing the QE programme if weak growth continues.”
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