Morning:
13°c
Worst is over but talk of recovery is still 'premature'
07.07.09
The worst of the recession is over, but talk of recovery is premature and unemployment continues to head over three million, a leading business group predicted today.
The British Chambers of Commerce said there had been "welcome progress" in recent months, especially among confidence levels, which had been badly hit by the economic downturn.
But the chambers, which was the first business organisation to warn of a recession a year ago, said sales, orders and employment levels in manufacturing and service firms remained weak.
Unemployment was still expected to reach 3.2 million, around 10% of the workforce, by mid 2010, with fewer than half of manufacturers and service sector firms trying to recruit workers in recent months.
The Government was warned that without more measures to limit the impact of the recession, the economy could suddenly "drop off."
The report, based on a study of 5,600 companies in the quarter to June, showed that "serious downward pressures" remained across all sectors of industry in every region of the country.
"Talk of recovery is premature. Further corrective measures are needed to support the economy. The marked improvement in confidence, albeit from exceptionally low levels, is welcome.
"Confidence levels are still historically weak and recent improvements can only be sustained if the economy continues to stabilise and the recession ends," said the report.
David Frost, director general of the BCC said the research sent a "strong message" to the Government that it was vital to nurture business confidence.
"The Government needs to think long and hard about its policies on taxation and red tape, which threaten to stifle growth and employment."
Mr Frost warned that the planned increase in National Insurance contributions from 2011 was a "tax on jobs" and be scrapped immediately.
He voiced business concern about the level of public debt and said firms which had cut costs and jobs in response to the recession could not understand why politicians were unable to face up to "difficult decision" in the public sector.
He called for a debate about reforming public sector pensions because of the "growing apartheid" with arrangements in private companies.
David Kern, chief economist of the BCC said the pace of decline in the economy was "moderating", but he warned that serious downward pressures remained.
"The worst of the recession appears to be over, but a recovery is not guaranteed. Sustaining any future recovery and preserving Britain's international credit rating, depends heavily on the adoption of a credible medium-term strategy for improving our public finances. To avoid undue damage to our productive base, painful cuts to spending programmes must be the main tool for repairing our public finances."
Reader views (12)
@ Peter, Moscow RF
Well at least we are not a third world country.
- Frank, Home Counties, England.
I wonder if the BCC could look into their crystal ball and tell me next weeks lottery numbers as they are really good. They can now forecast the end of the recession and the good times are going to roll ahead. David Frost can you please let me know the lotto or any lottery results as that would end my recession even earlier. I hope you are not sitting in your glass office and think you are looking into a crystal ball since if you are, you may get my numbers wrong.
- Sarah, ealing
Yesterday's Times reported Gordon Brown as saying that the worst of the recession is yet to come. Who are we to believe? Answer: neither of them. Nothing that Brown or the BCC can see in their crystal balls is of value.
The recession in the UK will continue for as long as Labour are in power and milk the working classes for taxes to fund their 6m public service voters.
- Nobby Clark, Perth, the Scottish one
Amazing a bunch of goons who were singularly unsuccessful in predicting the forthcoming depression, can now, apparently, see the end. Go and give a few coppers to the Labour party and join them in their fantasy world.
The BCC, along with Brown, should hang their heads in shame.
- Bingham Macnamara, lymington, hampshire
It'll be over when the fat lady sings, but I'm afraid she hasn't made make-up yet.
- Ted, London
Unemployment is rocketing upward and public debt rising at a meteoric rate. Combine that with a government which thinks that the answer to every situation is to impose taxation and we have an economically explosive scenario. We aren't at the end of the recession/depression we are about to enter a deeper phase. Once the Pound becomes a devalued currency, and the government's ability to raise money through debt ends, this nation will face economic turmoil that will make the 1930s Great Depression look like a Chimps Tea Party. There won't be the money to pay for the Welfare State and the NHS. The masses who depend on state handouts (encouraged by this social engineering government) will soon be on the streets demanding shelter, food and comfort. What will they do when nothing is forthcoming?
- Mike Of Epworth, Epworth, UK
It would, of course, wonderful if the worst of the recession was over, but people may confuse this with a possible recovery. It may well be that the worst is over but it seems to me, although I may be naive to say so, that calm is gradually returning to the markets which may confuse the reader. What I believe is that a period of calm should be observed and let the markets and traders proceed about their business free from media harassment; one does not want to see the effects of last winter repeated!
- Arthur Lincoln, Roeselare, Belgium
More Labour spin doctoring!!!
Labour want people to believe this is true so they will spend spend spend their way into more debt and kickstart the economy. It never worked before it could never ever work.
People need to realise that it will be at least another 1.5-2 years before things really do improve.
- Pj, London, England
Glad you're all in a positive mood- now for a dose of reality
We don't see it like that abroad- take a look at your FTSE- worst performing stock market so far this year at approx. -4%
Just keep shoring up your property market till it finally breaks
Fools
- Peter, Moscow RF
I have come to the conclusion that none of thses so called economics experts knows what the future holds ! Ken Clarke even said at the beggining of this crisis that everyone is just "stargazing"
- Wayne, Herts, Uk
Worst over? Rubbish.
This is a debt fuelled depression not a little recession.
- Dave Davies, Basingstoke, Hants
Let's have this discussion again in a years time shall we.
- Frank, Home Counties, England.
