World Business

British economy may face slow recovery

(Xinhua)
Updated: 2010-04-08 16:09

LONDON: British economic growth slowed in the first quarter of this year to 0.2 percent, down from an official figure of 0.4 percent for the previous quarter, the British Chambers of Commerce (BCC) said in its latest survey Wednesday.

The BCC questioned 5,500 businesses to make the survey, which showed that the manufacturing sector was suffering, while the services sector had improved.

According to the survey, manufacturing employment was down to -16 on the BCC's gauge for the first quarter from +3 in late 2009. Key indicators like investment and cash flow remained negative. However, manufacturing exports were up 4 points to +21.

In the services sector, growth was seen in both sales and orders, although both services and manufacturing sectors showed negative indicators in investment in plant and machinery as well as cash flow.

BCC Chief Economist David Kern said, "These results support the view that GDP growth stayed positive in the first quarter, but the recovery is set to remain fragile and sluggish."

Moreover, regardless of who wins the election to be held in May, "a new government must produce a more credible medium-term plan for cutting the country's huge budget deficit and reducing spending," Kern said.

The BCC's figures were released on the same day as the Organization for Economic Cooperation and Development (OECD) predicted that the British economy would grow by an annualized 2.0