Gdp Figures Confirm Worsening Threats Facing The Economy
23 May 2008 in Chamber News
Commenting on the GDP figures published today by the ONS, David Kern, Economic Adviser to the British Chambers of Commerce, said:"The revised GDP figures for Q1 2008, confirm that overall growth slowed markedly to 0.4% from 0.6%. New information on the breakdown of the Q1 GDP figures has highlighted a number of worrying trends."Investment spending fell 1.6% in the first quarter and is now showing minimal year on year growth of only 1.1%. Business investment has dropped and exports were flat in spite of the pound's competitive exchange rate. Whilst consumer spending held up well last quarter, future trends in spending are highly vulnerable given the fall in house prices and the squeeze on disposable incomes."The economy is still not in recession and a sharp downturn can be avoided if correct policies are adopted. The upsurge in oil and food prices make it difficult for the MPC to cut interest rates in the immediate future, however, the option of a cut must remain a realistic one given the threats to growth. It is important that the government carefully monitors and addresses any sign of new dangers facing more vulnerable small businesses."