BCC calls for growth plan as recovery falters

The British Chambers of Commerce (BCC) today added its voice to the growing chorus of concern about Britain's faltering economic recovery.

The body, which speaks for privately owned businesses, warned the pace of the recovery had slipped back during the second quarter of the year, and that while the Government's austerity drive was necessary, ministers had failed to come up with a credible plan for generating economic growth.

The BCC said it believed the British economy had grown just 0.3 per cent during the three months to June.

The body's director-general, David Frost, explained that while the coalition Government had begun to restructure the economy, not enough progress had been made.

"Our economy is out of balance: the public sector is too large and the private sector is too small; we do not export enough goods and services, meaning we run up continual trade deficits," he said.

"We accept the need to persevere with painful measures to cut the deficit. But the Government must move beyond the rhetoric of growth, and introduce radical reforms to help businesses export, invest and create more jobs."

The warning is based on a survey of 6,600 BCC members across the country, with the majority, in both manufacturing and services, warning that the domestic market remained sluggish and that they were therefore prioritising exports.

The manufacturing sector's export performance remains strongest, the BCC said, though sales are beginning to slip back compared to imports, while services companies are also struggling. On business confidence, BCC members said they felt slightly more optimistic than in the first quarter of the year, though confidence has yet to return to the levels seen at the end of the recession in the second half of last year.

Worryingly, that lack of confidence is reflected in the employment market, where companies said they had barely added any staff at all over the second quarter of the year.

However, there is now some optimism that recruitment may increase during the months ahead.

BCC members also warned that cost pressures were continuing to bite, with a third more businesses saying they felt compelled to raise prices over the next quarter than not.

David Kern, chief economist at the BCC, said: "Recent economic data suggests that the rebalancing of the economy towards net exports is still not strong enough.

"With the international situation becoming more uncertain, there are worrying signs that global growth is set to slow, and this will add to the challenges facing UK exporters."

Mr Kern added that the economy remained in desperate need of support from policymakers.

"To minimise dangers of a setback, the Government must implement more growth-enhancing policies that will enable private-sector firms to increase productivity and drive the recovery forward," he said. "On its part, the Bank of England's Monetary Policy Committee must postpone premature interest rate increases while fiscal policy is still being tightened and wage pressures remain weak."

The BCC's concerns were underlined by a separate survey from accountancy firm Deloitte, which said today the confidence of finance directors at Britain's largest companies was now at its lowest level since the period after the collapse of Lehman Brothers in September 2008. A third of finance directors now think there is a chance of a double-dip recession.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk