Economy grows by 0.2 per cent but firms still feel pressure - Chamber

The UK economy grew faster than expected in the second quarter of this year, according to the latest GDP figures.

The Office for National Statistics said UK GDP increase by 0.2 per cent between April and June, up from 0.1 per cent in the previous three months and the best quarterly reading in more than a year.

The growth was boosted by a recovery in car manufacturing and a surprisingly strong June.

Economists had forecasted no growth in output during the quarter.

Greater Birmingham Chambers of Commerce said that while the faster than expected growth is positive - and leaves the UK on course to avoid a recession - it will do little to alleviate the pressures facing businesses.

Emily Stubbs (pictured), senior policy and projects manager at the GBCC, said: “These latest GDP figures are better news than anticipated, and the UK remains on course to avoid a recession.

“However, this won't be particularly reassuring for businesses while economic growth continues to be constricted by high inflation, rising interest rates, tight labour market conditions and global economic uncertainty.

"Our latest Quarterly Business Report found that almost half of Greater Birmingham businesses expect the price of their goods and services to rise over the next three months, with labour costs, recruitment difficulties and utility costs significantly contributing to price pressures, and most businesses continuing to report no improvement to cashflow or investment.

"While local businesses remain resilient, clear direction is needed from the government and Bank of England, not least on interest rate policy and a long-term plan to unlock investment.”

Click here to read the latest Quarterly Business Report.