By Max Clarke
Commenting on the revised GDP figures for the fourth quarter of 2010, published today by the ONS, is David Kern, Chief Economist at the British Chambers of Commerce (BCC):
“These figures are disappointing and worse than expected. Contrary to hopes, the decline in GDP in the fourth quarter was even larger than initially estimated, and both manufacturing and services have been revised down. Business investment also fell in the quarter, while imports grew faster than exports.
“But we should not be despondent. There are signs that growth rebounded in the first quarter of this year, and it is important to remember that the fourth quarter figures were affected by severe weather conditions. Despite the disappointing data we have seen, we believe that the Government must persevere with its deficit-cutting programme.
“The economy is clearly fragile and every effort must be made to ensure that the recovery continues. The MPC must postpone interest rate increases until the initial impact of the austerity measures have been absorbed. On its part, as it prepares its March Budget, the Government must remove obstacles that hamper businesses in their efforts to create jobs, invest and export.”
This disappointing data highlights the need for radical Government action on growth, as recommended by the BCC’s Budget submission, also published today.
Speaking ahead of the upcoming Budget, David Frost, Director General of the British Chambers of Commerce, (BCC) said:
“Business is not seeking handouts but needs the Government to create a climate in which they can grow. That means less not more employment legislation, a greater focus on boosting British exports and keeping pressure on the banks to ensure that businesses can access finance.
“We need to see the Government taking some pro-growth steps and deliver a Budget which boosts business confidence, encourages investment and rekindles the spirit of enterprise. If the Government provides a radical framework, business will do what it does best — creating wealth and jobs, innovating to deliver strong companies and providing the much needed growth for this country.”