U.K. to Avoid Recession as ‘Sunlit Uplands’ Glimpsed, BCC Says
The U.K. economy will avoid another recession and exports will help propel a “modest” recovery this year, according to the British Chambers of Commerce.
The BCC’s gauges of domestic and foreign demand at manufacturers and services companies all rose last quarter, the London-based group said in a report today, with the export measures close to a record.
“Fears of another recession are calmed by our results,” BCC Chief Economist David Kern said. “The economy’s performance is weak by long-term historical standards. However, while remaining below trend for some time, growth is likely to stay in positive territory.”
Britain’s manufacturing slump eased in March and services continued to expand, economists said in Bloomberg News surveys before two reports from Markit Economics this week. The Bank of England will leave its target for stimulus unchanged at 375 billion pounds ($571 billion) after a two-day meeting that starts tomorrow, according to another Bloomberg survey.
The BCC’s gauge of domestic manufacturing orders rose to 14 last quarter from 3 in the previous three months, while the export measure increased to 22 from 11. Within services, domestic orders rose to 11 from 7 and export orders surged to 26 from 18. Most gauges of confidence also improved, with the outlook for profits at the highest in more than five years, according to the BCC, which surveyed 7,265 companies between Feb. 18 and March 11.
“These results provide a glimpse of the as-yet-distant sunlit uplands of recovery,” said BCC Director-General John Longworth.
In a separate report, Lloyds TSB said its business confidence index rose to a four-month high of 20 in March from 13 in February. A measure of the outlook for business over the coming year also improved, to 41 from 32.
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