Britain avoids double dip recession but backslides still in sight

Britain avoids double dip recession but backslides still in sightThe British chamber of commerce warned today that though the economy has escaped a double dip recession, a credible plan has to be drafted to continue the recovery and put Britain’s public finance back in order.  

The survey conducted by BCC said that the sales in the manufacturing sector had grown to worse and so were the number of employees in the payroll. But, it further added that the service sector was engaged in doing the rescue job by mopping up higher revenue both, in domestic as well as the overseas market.

BCC’s Chief Economist, David Kern pointed, “The dreaded double dip didn’t happen. We have had many problems and in addition there was the increase in VAT and the bad weather. The difficulties of both of those in a weak economy could have pushed the economy back down”.

Manufacturing sector, being the worst victim, was hit hard by the falling sales and job losses, especially in areas like West Midland, Wales, Northern Ireland and the east of England, the survey said.

However, Kern warned that the falling investments, if not controlled, might further depress manufacturing. He advised the next government and the Bank of England to put a sound monitory policy in place to keep the interest rates at 0.5 per cent.

Kern also stressed that the new government, to be elected in a few months time, to draft a credible medium term plan to restrict the country’s humongous budget deficit. “This will strengthen Britain’s credit rating, making it easier for the monetary policy committee to keep interest rates low for a prolonged period, and underpin the recovery,” he added.

Meanwhile, BCC maintained its earlier call to scrap the one percentage point rise in employer’s national insurance contribution as planned for 2011 and replace it by similar rise in VAT.