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Recovery continues but services sector remains fragile

Simon Quicke

Despite the UK economy continuing to emerge from recession there continue to be fears that the fragile recovery could be derailed.

The latest economic survey from the British Chambers of Commerce (BCC) found that the second quarter built on the improvement in the first with growth in Q2 of around 0.7% in the economy.

But concerns were raised about the state of the services sector and the consequences for prices as increases in component costs were passed onto customers.

"We still have concerns about sluggish growth in the service sector, which emphasises why the Government must continue to promote the best possible business environment, in order to help companies invest and grow," said David Frost, director general of the BCC.

"Furthermore, with around 80% of manufacturers reporting that they are under pressure to increase prices, there is potentially a big issue bubbling under the surface," he added.

The figures from the BCC comes out against a backdrop of intense government action in the battle to bring down the public deficit with cuts being announced at the moment on an almost daily basis.

"With very austere times ahead, no one should kid themselves into thinking that the UK's economic recovery is totally secure," added Frost.


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