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15th June 2023

Economy continues to skirt recession

Reacting to the latest GDP data from the ONS, David Bharier, Head of Research at the BCC, said: 

“Today’s GDP figure of 0.1% growth for the three months to April further indicates the UK economy is trapped on a low-growth trajectory. Our own forecast expects 0.3% growth for the whole of 2023 as our research continues to show that most SMEs are still holding back on their investment plans.

“Our forecast also expects a 4.7% decline in exports this year. Further upcoming changes on trade with the EU, such as new reporting requirements and import charges, will also add more pressure to exporters, many of whom have seen diminished activity due to mounting trade barriers.

“Following three years of economic shocks, a stronger investment environment could be created by easing the tightness in the labour market, tackling stubbornly high inflation, and significantly improving our trading relationships.”

Also commenting on the latest GDP data, Paul Butterworth, CEO of Chambers Wales South East, South West and Mid said:

“The UK has avoided falling into recession so far in 2023, with the most recent data putting UK GDP growth at 0.1%. This is to be expected, given the vast economic difficulties that the UK and Wales have faced in recent years, as businesses have not been able to flourish under difficult circumstances.

“However, even in a stagnant economy, avoiding a recession is still a major achievement in avoiding redundancies and even further scaling back of investment from SMEs. It is a testament to the resilience and flexibility firms have had to show since 2019.

“With wholesale energy prices dropping and inflation falling below 10%, this may indicate that the worst of the economic issues have passed. As inflation continues to fall and energy prices drop, there will be great opportunities for Welsh businesses, as the economy will be less restricted. This could allow policy makers to invest into net zero, infrastructure and skills that businesses desperately need for growth.”

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