Economy remains in precarious position despite return to growth - Chamber

The UK economy returned to growth during November but remains at risk of a technical recession, new figures revealed today.

And Greater Birmingham Chambers of Commerce said the Chancellor must use the forthcoming Spring Budget to create a blueprint for investor confidence and growth, with many businesses feeling the impact of raised interest rates and ingrained recruitment challenges.

The Office for National Statistics (ONS) reported an early estimate for output growth of 0.3 per cent for the month - recovering from a 0.3 per cent decline witnessed in October when many weather-sensitive sectors were hit by heavy rain.

The data showed retail was a major contributor to that growth due to Christmas shopping and Black Friday sales.
Production output grew by 0.3 per cent in November, following a fall of 1.3 per cent in October.
The construction sector fell by 0.2 per cent, after a fall of 0.4 per cent in the previous month.

Raj Kandola, director of external affairs at Greater Birmingham Chambers of Commerce, said: “Despite a minor upturn in growth recorded for November, this morning’s GDP results underline the precarious state of the economy as we look ahead to the rest of the year.

“Output shrank in the three months to November and all eyes will now turn to the December data to see whether the UK manages to avoid a technical recession.

“Whilst it’s reassuring to see that the rate of CPI inflation has come down in recent months, the impact of a prolonged period of raised interest rates coupled with ingrained recruitment challenges continues to have a bearing on local firms, as early analysis from our latest Quarterly Business Report survey has revealed.

“With growth prospects looking subdued, the Chancellor will need to use the upcoming Spring Statement to create a blueprint that will drive investor confidence and unlock growth.

“Tackling business cost pressures, hiring challenges and fostering closer ties with international markets needs to figure highly on the priority list.”

The GBCC's Quarterly Business Report launch event for Q4 focuses on growing the region's entrepreneurial landscape - find out more.