Thursday 5 July 2012
Businesses seeking improved trading conditions to support growth may need to be patient, it has been suggested.
David Kern, chief economist at the British Chambers of Commerce, said that overcoming the obstacles precluding the return of the economy to normal growth "will be difficult and will take time".
"UK businesses and consumers must realistically plan for a period of relatively low growth in the next few years," he stated.
Mr Kern said fiscal austerity is restoring stability to the UK's public finances, but this is constraining consumer spending.
Meanwhile, the eurozone’s problems are creating a challenging environment for UK exports, he claimed.
"But prospects will improve later in the year and in 2013, as falling inflation improves consumers’ disposable incomes," Mr Kern predicted.
He said exporters will ultimately benefit from efforts to diversify their sales into faster growing markets outside Europe.
John Longworth, director general of the BCC, said: "While domestic growth continues to bump along the bottom, the silver lining is an increase in firms looking for export opportunities, and in many cases, with countries outside Europe.
"Economic growth should be the government’s main priority. As the eurozone crisis rumbles on, businesses are feeling the effects, and so growth is still weak."
Posted by Steve Williams