Commenting on the manufacturing output figures for July, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“These figures confirm a picture of slow growth in manufacturing. However, on balance they were marginally better than expected, and should not encourage further doom and gloom about the UK economy. Although growth will remain sluggish in the third quarter, we are unlikely to see a new recession.
“The economic challenges ahead should not be underestimated. Turmoil in the financial markets and new obstacles facing the eurozone and the US will make it difficult for Britain’s manufacturers to compete internationally.
“While the government perseveres with its fiscal programme, everything must be done to ensure that the manufacturing recovery, though weak, does not falter. The MPC must keep interest rates as low as possible for as long as possible, and will have to start thinking about an early injection of additional QE. On its part, the government should be more proactive in pursuing growth-enhancing policies that will help UK businesses create jobs, export and invest. Particular attention should be paid to helping smaller firms break into fast-growing emerging markets, not just the slower-growth economies of Europe and North America.”