According to the British Chambers of Commerce, it may still be possible to avoid a double-dip recession despite the first six months of 2012 presenting difficult times for some businesses. BCC conduct a quarterly survey of 7,850 companies, and the last three months of 2011 suggested that UK recovery would be slower than expected.
The business group forecast that stagnation of GDP was likely until at least six months into 2012. During one quarter of 2012, the economy is expected to contract and unemployment figures are expected to rise from 2.62 million to 2.77 million by the end of 2012. The difficult trading conditions will continue for much of the year, which is due to:
“worsening international situation and growing risks facing the euro zone”.
These factors are a threat to business confidence and UK exporters according to John Longworth, director general of BCC. However, he did add:
“A new recession is not a foregone conclusion. A slow down across the Eurozone is inevitable, but Britain need not suffer a similar fate.”
Longworth called to the government for action on proposed credit easing plans, to improve accessibility to business finance for small businesses. Infrastructure development would also boost jobs and economic growth. He emphasised that swift action was required by the government to implement promises made during the Autumn Statement.
In response to the predictions by BCC, the Department for Business, Innovation and Skills said that a number of initiatives had been introduced to support small businesses, including reduction of Corporation Tax.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox