BCC: UK recovery on course, but there is no room for complacency

Commenting on the preliminary GDP figures for the 3rd quarter of 2010, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce, said:

"The revised GDP figures confirm an expected increase for Q3 of 0.8%. However predictions that the annual growth figure would be revised down proved unfounded. Year-on-year growth remains at 2.8%, a very respectable figure. 

"The UK recovery remains on course and is broadly based. All major sectors recorded growth, despite an erratic strong surge in construction which partly reverses previous sharp declines. The detailed GDP figures show positive features, with strong growth in manufacturing output, and in exports. 

"The figures confirm our assessment that the UK economy is in a more robust state than many had thought. But we have not yet seen the impact of the tough deficit-cutting measures that the Government will start implementing early in the New Year. Businesses and consumers will face growing pressures in the next few months, and it is important to avert risks of a setback. 

"The MPC must persevere with expansionary policies and reject any thought of raising interest rates in the foreseeable future. An increase in the quantitative easing programme must remain under active consideration if the economy shows renewed signs of weakness. On its part, the Government must focus all its efforts on enabling the private sector to make 2011 a Year for Growth. Obstacles that hamper businesses in their efforts to create jobs, invest and export must be removed."