Experts warn of 'uncertain' economic recovery

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The Independent Online

Industry experts said the outlook for economic recovery was "uncertain", despite the 0.1 per cent increase in growth which signalled the end of the recession.

Lee Hopley, chief economist of the Engineering Employers Federation, said: "Whilst today's data confirm that manufacturing is now out of recession, they also continue to raise questions over the health of the wider economy.



"The trajectory for the recovery, particularly in the next six months, is an uncertain one and the best prospects remain an export driven turnaround."



Labour MP John McDonnell (Hayes and Harlington) said: "The confirmation that the UK has emerged from recession is, of course, welcome, but the fragility of the economy and its vulnerability to a double-dip recession cannot be under-estimated."



Andrew Fisher, co-ordinator of the Left Economics Advisory Panel, said: "The recession is not over for the 2.5 million unemployed and the 1.8 million families waiting for housing. Nor is it over for the millions more who have reduced their hours or taken a pay cut during this recession.



"The risk of a relapse into recession is acute - with the UK banks still exposed to the US housing market, and consumer demand here weakened by unemployment, pay freezes and short-time working."



John Wright, chairman of the Federation of Small Businesses, said: "Today's GDP figures begin to show encouraging signs, although at 0.1% recovery remains frail. In order to strengthen the recovery it is important that we boost consumer confidence and demand and that interest rates are held steady as continued investment in the economy will be the key to ensuring a sustainable recovery.

"For small businesses, having access to affordable finance and credit is important, as firms will look to grow and create jobs.



"The FSB urges Government to rethink its plans to increase employer National Insurance contributions as this tax on jobs will discourage small businesses from taking on additional staff, which will prevent them from growing and put a further block on economic recovery."



TUC general secretary Brendan Barber said: "These figures show just how fragile the economy is. With the threat of a double dip recession looming large, it would be madness to cut public spending now.



"The 2.5 million people currently without work will draw little comfort from the news that the UK is now officially out of recession. Unemployment will increase again, with more people continuing to face long spells out of work.



"No sectors of the economy are fully recovered and areas such as construction are still really struggling. Tough decisions lie ahead to get Britain back in full working order."

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