Commenting on the revised GDP figures for the second quarter of 2011, which put growth at 0.2%, David Kern, chief economist at the BCC, said: "These figures were broadly as expected, confirming that the economy grew at a slow pace of 0.2% in the second quarter of the year. While special factors, such as the Royal Wedding, partly account for the weak growth, the overall pace of expansion in the economy is disappointing. The decline in manufacturing in the quarter is a concern, with an initial estimate of 0.3%, which has been revised to a larger decline of 0.5%.
"There are difficult times ahead for the UK economy but there is no need for undue pessimism. Economic growth remains in positive territory and other nations face the same challenges. For example, Germany grew by only 0.1% in the second quarter while the French economy was stagnant.
"Based on these figures, we believe that the government must persevere with its deficit-cutting plan aimed at stabilising our public finances. But we mustn't be complacent and every effort must be made to avoid an economic setback. The Bank of England should maintain low interest rates for an extended period and consider increasing the QE programme if there are further signs of weakness. On its part, the government should explore more policies to help boost growth, such as reducing regulatory burdens which prevent businesses from creating jobs and wealth."
