By Claire West
Today's third-quarter GDP figures showed better-than-expected growth of 0.8% and we asked the following professional firms for comment.
Anthony Harris, director, Critchleys said:
“I believe we can be optimistic. If we look at the two quarters together, we see a reasonable level of growth. The economy certainly is improving, and the recent spending review will only help this.”
Jonathan Russell, partner, ReesRussell and vice-president UK200Group:
“Small and medium-sized businesses remain very concerned about the general economy and continue to trade on a day by day basis. The worry over the cuts to be announced by the Government kept many in a cautious mood and they now remain so, waiting to see what impact the announcements actually have.
“Some optimism is there in the manufacturing side as price rises coming from the Asian economies make UK supplies more competitive, coupled with the desire of many customers to reduce the risk of delays in supply. The uncertainty and caution at employee level is keeping pay demands in the private sector in check, which in turn is enabling more competitive pricing.
“Concern is there in the retail sector about the lack of consumer demand, which is what drove the economy forward previously, and the recent increases in fuel prices will again damage consumer spending in other areas. Concern over the lack of liquidity in the banking sector remains a major issue and as a result many will still be looking to reduce debt rather than speculate.
“No one anticipates a rapid recovery, indeed many fear one, and most would like to see a steady and gradual recovery which they feel certain can be sustained. The SME sector has always been more attuned to the medium and long-term planning of their business as opposed to larger businesses which are driven to give shorter-term rewards to shareholders.”
Geoff Carton-Kelly, partner at Baker Tilly Restructuring and Recovery LLP, says:
“The UK economy has been granted a stay of execution. Today’s figures will provide some relief for businesses still in shock from the Chancellor’s Comprehensive Spending Review. The growth figures are surprising but encouraging and will help to push back further talk of quantitative easing, but as the cuts bite, we still expect there to be economic pain on the horizon.
“Although the government is now trying to shift the public agenda from cuts to growth, I fear that we might not get out of first gear. Encouraging the private sector to support the economy and create jobs will be held back by the ongoing credit restrictions, public sector job losses, benefit cuts and higher taxes which will mean sluggish growth and businesses should still be concerned about what the new year will bring.
“The real impact of the cuts will not be seen until Q4 2010 and into first half 2011. The cuts will be deep and recovery will likely slow down as a result. Therefore, it is even more essential to be vigilant and maintain a close eye on your cashflow, credit, suppliers and customers for the foreseeable future. ”