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13th March 2024

Chambers respond to latest GDP data

The ONS has released the GDP data in January, estimating a small percentage of growth.

Paul Butterworth, CEO at Chambers Wales South East, South West and Mid, said:

“It is encouraging to see that GDP grew by 0.2% in January, boosted by strong performances in the services and construction sectors. However, the wider picture revealing a 0.1% decline in GDP in the three months to January and similar falls in services, production and construction output, shows that the UK economy is still struggling to break out of a low to no growth cycle.

“Businesses in Wales are aware of the factors that are hindering their growth such as high interest rates and inflation, ongoing skills shortages and a hesitancy to invest amid economic uncertainty.

“While last week’s Spring Budget did introduce some positive measures to tackle challenges surrounding investment and growth, including the increased VAT threshold and access to finance for SMEs, businesses are still in need of a clear strategy to support and promote long-term growth.”

David Bharier, Head of Research at the British Chambers of Commerce, said:

“Today’s data, showing an estimated 0.1% decline in GDP in the three months to January is further evidence that the UK economy remains in a precarious state. However, estimated growth of 0.2% in January may indicate the 2023 technical recession could soon be over.

“Businesses are clear about the factors that are holding back growth – high inflation, high interest rates, skills shortages, a lack of infrastructure investment, and trade barriers with the EU.

“Our most recent economic forecast expects GDP growth to be below 1% over the next two years.

“Last week’s Budget saw some positive measures for businesses, including an increase to the VAT registration threshold. However, the statement was not a game changer and the UK stills lacks a clear industrial strategy to unlock long-term growth.”

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