Rapid rise in GDP raises concern
Coventry and Warwickshire Chamber of Commerce has urged caution following the release of the latest gross domestic product (GDP) figures.
According to the National Office for Statistics’ preliminary data, the economy grew by 1.1 per cent in Q2 – almost double the forecast growth.
Louise Bennett, chief executive of the chamber, said although the figures were “better than expected”, a prolonged recovery still needed to be nurtured.
She said: “The government has only recently made a raft of cuts and they will not have filtered into the economy yet.
“I would urge the Bank of England to keep interest rates low for the foreseeable future and for the government to stick to its policy of trying to ease the burden on business.”
Manufacturers’ organisation EEF has also raised concerns with the rapid economic growth.
Midlands regional director, Martin Wassell, described the increase as “surprisingly strong". He added: “The numbers also raise questions about whether this growth can be maintained in the second half of 2010.
"The government’s fiscal consolidation will begin to bite in the next few months and so is likely to drag on growth, while there are ongoing questions as to whether the financial markets can withstand persistent volatility due to sovereign debt worries."
