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July 11, 2014

UK economy “moving in right direction”, says BCC

UK economy “moving in right direction”, says BCCThe economy is “strong and moving in the right direction”, according to the Quarterly Economic Survey for Q2 2014 published by the British Chambers of Commerce (BCC).

The BCC survey polled 7,000 UK businesses and it shows that many key balances are higher than they were before the recession. And although many of the balances for manufacturing and services are slightly down on the quarter, they are stronger than their long-term average.

John Longworth, BCC director general, said that moderate declines of the pace of growth were “unsurprising” given that the economy “jolted forward” in the first quarter of the year. He also urged the Bank of England not to act prematurely on raising interest rates as this could “limit the growth ambitions among the very firms we are counting on to drive the recovery”.

Key findings in the Q2 2014 Quarterly Economic Survey include:

  • in manufacturing, three balances were at their all-time highs in Q2 2014: domestic sales (+42%), profitability confidence (+51%) and capacity utilisation (+46);
  • in services, there were no balances at their all-time highs in Q2, compared with two service balances at their all-time highs in Q1 (export sales and orders);
  • all the export and investment balances fell in Q2, for both manufacturing and services;
  • despite these falls, Q2 export balances and most investment balances are still above their average 2007 pre-recession levels;
  • concerns around interest rate rises were higher in Q2 than in Q1.

John Longworth said: “These are strong results that show the recovery is moving forward. While we never like to report even modest declines in our investment and export balances, these are unsurprising, as the economy jolted forward last quarter and has now settled into a period of more stable growth. But we must still aim higher.”

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