Recession fears as GDP falls
The government should do more to ease tough trading condition for businesses in the East Midlands following the decline in the UK's economic output. That's according to the chief executive of the Derbyshire and Nottinghamshire Chamber of Commerce.
According to data from the Office for National Statistics (ONS), UK economic activity shrank by 0.2 per cent in the last three months of 2011.
The drop is worse than expected as gross domestic product (GDP) expanded by 0.6 per cent in the third quarter of last year.
George Cowcher, chief executive of the Derbyshire and Nottinghamshire Chamber of Commerce, said: "The preliminary GDP figures for Q4 are both disappointing and worse than expected, but it is important to remember that these figures are just an estimate and could well be revised upwards in the future.
"Recent surveys, including the chamber's own QES, which often mirrors changes in GDP, still showed growth – albeit slight – in the economy during the last quarter of the year. There will also be a time lag between the announcement and introduction of growth-promoting measures in the Chancellor's Autumn Statement and their impact on the real economy.
"There is, however, no denying that trading conditions do remain tough for many businesses across Derbyshire and Nottinghamshire, which reinforces the need for government to do more to promote growth in the private sector.
"Reducing red tape, cancelling the planned above-inflation increase in business rates, providing more support for exporters, and implementing an effective credit-easing programme as soon as possible, will help businesses to grow at this crucial stage in the recovery."
The "dire" decline in the UK's economic output could mean a recession is on the way, it is claimed.
"The dire monthly output data for the early part of the quarter had implied that the economy contracted in Q4, so the figures don't come as a huge surprise," said Andrew Goodwin, senior economic adviser to the Ernst & Young ITEM Club.
"The only crumb of comfort we can draw is that the monthly services data rebounded in November. With the surveys also having strengthened in December, it gives us some confidence that we may be over the worst," added Goodwin.
