Fears for UK as economic growth rate slows

Concerns over the UK’s economic recovery have been fuelled as new data released by the British Chambers of Commerce on Tuesday revealed a slowing in the country’s economic growth rate.
The BCC has reported that the economy slowed to a rate of 0.4-0.5 percent in the last quarter of 2010, down on the official growth rate for the July to September quarter of 0.7 percent.

Although manufacturing output and exports were strengthened last year, overall growth was stunted by a poor performance in the service sector.

Director General of the Chambers of Commerce, David Frost, said in an interview with the BBC:

“The manufacturing sector is being driven by exports, not least to the growth areas on the far side of the globe, but the service sector is suffering from a lack of confidence with consumer spending being reined in.”

It is feared that further losses in the service sector are to be seen as a result of the recent VAT increase and government deficit-cutting measures.

The BCC has urged the Bank of the England and the government to “act forcefully to support growth,” and to maintain low interest rates until the UK’s economic recovery is stabilised.

Mr Frost added, “We call on the government to take concerted action now to ensure recovery continues.”

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