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Britain edges out of recession, but is the worst really over?
by Stefan Appleby on 26 January, 2010
So, today we “officially” moved out of recession. The economy grew by 0.1% in the last quarter of 2009, the Office of National Statistics announced today, meaning that the 18-month recession – the worst since the 1930s – is officially over.
However, despite the good news, it is still too early to hang out the bunting and start assuming that your customer’s basket-spends will rise straight away. The 0.1 % growth was much lower than the 0.3% that the Government had predicted, and leading economists, city analysts and senior figures in retailing are talking about the risk of a “double-dip” recession with some authority.
The impact of further economic turmoil for small businesses could be deep. The Federation of Small Businesses, reacting to the announcement, has asked the Government to reconsider its plans to increase employer National Insurance contributions and to stress the importance of access to affordable finance and credit for small businesses.
The sort of reassurances that these moves would provide to small businesses would help restore confidence before the General Election, which is widely believed to be taking place on May 6. And it’s this confidence that consumers and retailers need as we move further into the New Year. The recession may be “officially” over, but it will take much more time before consumers are as confident with their cash as they were before the crash began in 2008.
Today’s news can be greeted with a small cheer – but the horizon isn’t entirely clear yet. The hard work for the continually hard-working smaller retailers continues unabated.
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Comments (2)
With the bad weather in January, what’s the betting that the UK economy shrinks again in the first quarter of 2010!
Steve
A growth of only 0.1% was extremely disapponting as it is within a margin of error and can easily swing negative. The consensus is that it can be adjusted upwards which will be more positive and encouraging but let us wait and see.
In the meantime there are other signs that the economy is picking up i.e more manufacturing activity, a surge in house prices etc. But also there is talk of double dip and bumps along the road. Whatever it is, it is going to be very fragile. What we would like is an improvement in jobs position so that more people can go back to work which in turn will give confidence.
There was one encouraging evidence that the independent convenience sector has performed better than the multiple supermarkets but that was due to adverse weather conditions. Independents can compete on service and community spirit and long may it continue. Price is not every thing.