Alexander to Urge U.K. Companies to Stop Hoarding Cash BalancesSvenja O’Donnell
U.K. Chief Secretary to the Treasury Danny Alexander will urge businesses to invest the cash balances they built up during the crisis to help boost the recovery.
“We’ve done the emergency repairs,” Alexander will say in a speech at the Confederation of British Businesses today, according to extracts released by his office. The recovery “won’t get into top gear until British business starts investing some of the half trillion pounds worth of cash it’s built up in reserve.”
Britain’s economy is strengthening as confidence returns and the housing market picks up. Chancellor of the Exchequer George Osborne has still pledged to stick to his austerity plan and has cautioned that risks to growth remain.
Cash balances in non-financial businesses rose 14 billion pounds ($23 billion) in the last quarter and increased 104 billion pounds, or 26 percent, since pre-crisis levels to more than 500 billion pounds, according to the Treasury. Business investment remains at 25 percent below its pre-recession peak.
Data this week will show U.K. economic expansion accelerated to 0.8 percent in the third quarter after 0.7 percent growth in the three months through June, according to the median forecast of 40 economists in a Bloomberg News survey. The number will be released by the Office for National Statistics on Oct. 25.