Concerns raised over slow GDP growth
The UK economy has returned to growth in the first three months of 2011. Gross domestic product grew by 0.5 per cent in the first quarter of the year, the Office for National Statistics (ONS) said – however, East Midlands' business leaders have warned "concerns still remain".
The rise follows a 0.5 per cent contraction in the economy at the end of last year, which was blamed on wintry weather.
George Cowcher, chief executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: "Locally, the economy remains relatively robust against a backdrop of tax rises and contractions in public sector expenditure.
"Concerns still remain about fuel prices, tax changes and inflation, which mean that people have less disposable income to spend, leading to further pressure to increase pay. To this end, the Bank of England should resist the urge to increase the base rate of interest until later in the year when the recovery is more stable."
Cowcher's concerns were shared by Wayne Cox from KPMG in the Midlands, who warned that such a slim rise in GDP was "cause for concern".
He said: "While it is always good to see the economy growing, these figures do provide cause for concern. While growth is positive, given the low base of the comparative from the previous quarter, it is a sure sign that there is still fragility in the economy and it will take some time to overcome this.
"On the positive side, however, business confidence remains crucial in achieving economic growth and with many local businesses having got their housekeeping in order over the last few years, the foundations upon which to build this growth are now strong."
