Birmingham business leaders issue warning as UK pulls out of recession
Jan 26 2010 By Alun Thorne
Business leaders are urging companies not to underestimate the tough challenges which 2010 will present despite the Office for National Statistics (ONS) announcement today that the UK has finally emerged from recession.
Paul Bassi, president of the Birmingham and Solihull Chamber of Commerce (BCI), said the car scrappage scheme and strong Christmas figures have boosted retail sales but there were still some tough times ahead.
He said: “The latest GDP figures only show a technical exit from the longest recession since the second world war. Conditions remain tough.
"Cash flow remains critical and further measures, such as the scheduled increase in national insurance contributions in 2011, won’t make trading conditions easier in the medium term. VAT has already returned to 17.5 per cent and businesses should not be lulled into a sense of complacency.”
BCI’s quarterly economic survey showed that companies are turning more and more to exports for survival. Mr. Bassi added: “Companies selling overseas are in a strong position, particularly those exporting to Far East Asia.”
ONS said the economy had grown by 0.1 per cent between October and December, ending a record six straight quarters of contraction. The UK economy shrank by 4.8 per cent in 2009.
Louise Bennett, the chief executive of the Coventry and Warwickshire Chamber of Commerce, said the growth figures were symbolic but that there was no room for celebration.
She said: “There has been cautious optimism out there for a few months now and the fact that the recession is officially over is symbolic and can, in itself, breed confidence.
“The growth is very small, however, and proves just how fragile the recovery is going to be for the economy. While many businesses will say they feel the worst is over, some are just falling on hard times now.
“Rather than being a cause for celebration, the small growth should act as a warning shot for this Government and the next one, that business needs more support than ever.
