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Britain will avoid triple-dip recession: Survey

| | Updated on: Apr 02, 2013

Britain will avoid a triple dip recession mainly because of the strength of its services sector, the British Chambers of Commerce (BCC) said today as it released the results of its first quarter economic survey.

Services, which account for more than three quarters of the country’s economic output, saw exports that equalled the all-time highs of 1994, the BCC said, while demand in manufacturing also increased.

Business confidence and willingness to invest also improved though unemployment balances weakened, according to the BCC, which surveyed 7,000 businesses.

Exports have been boosted by the weakness of the pound.

“The Q1 improvement in most key balances supports our view that UK output has continued to grow in the early months of 2013,” said the BCC’s chief economist David Kern. “Fears of another recession are calmed by our results.”

The Office for National Statistics (ONS) said that growth shrank by 0.3 per cent in the final quarter of last year. It is to give its preliminary estimate of first quarter growth later this month. Two successive quarters of negative growth are generally regarded as a recession.

“The survey reinforces our assessment that recent ONS GDP figures have exaggerated the weakness and the volatility in UK output,” said Kern, warning that if the ONS’ coming figures are “negative, and described as a ‘triple-dip recession’, business confidence will again be damaged unnecessarily.

“The Q1 results confirm that the economy’s performance is weak by long-term historical standards and suggests a slow and protracted upturn,” he said.

However, he said, growth was likely to continue and “the strength of the export balances, particularly in the service sector, confirms the existence of huge untapped potential that must be unleashed.”

Published on March 12, 2018

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