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Is the UK economy on the mend?

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Could there be light at the end of the tunnel for Britain’s economy? We’ve been seeing all manner of positive signs since the ONS announced in June that the UK didn’t actually experience a double dip recession.

From lightning growth in house prices to a slowly but surely growing manufacturing sector and decent export growth, there are many indicators that things could be getting better.

Today the BCC has released updated forecasts predicting overall growth of 1.3 per cent for 2013, compared with a previous prediction of 0.9 per cent. Whilst this figure still lies well below the 3+ per cent growth enjoyed prior to 2008, but it does suggest a marked improvement on the last couple of years.

John Longworth, director general of the BCC says: “The improved outlook is testament to the steadfast determination shown by businesses in previous quarters, who have consistently displayed confidence in the face of unwarranted pessimism over the economy”

Could this pessimism be turning around though? Other data released today shows that public faith in the economy could be on the rise. GFK’s Consumer Confidence Barometer shows that public confidence in the economy is at its highest level since 2009.

Despite this optimism though, there are plenty of reasons to be cautious. Unemployment still remains high at around 7.8 per cent – meaning 2.5m willing and able employees are out of work.

Concerns have been raised that the Help to Buy scheme, which supports first time buyers to secure a mortgage, could be creating a dangerous housing bubble with implications for the wider economy.

Internationally, the Eurozone crisis feel like it’s abated for now but could flare up again, and decelerating growth in emerging markets has the potential to be a drag on growth globally.

Longworth continues: “Unfortunately however the recovery is not yet secure. We have had false dawns in recent years and although this upturn appears to be on stronger ground, we must be aware that complacency could lead to setbacks.

“Improving access to finance for viable, fast-growing businesses is a major priority, and the government and the MPC must do more to ensure that vibrant SMEs can obtain finance on reasonable terms. 

“The government must also work with the Bank of England and the Treasury to underwrite private sector investment in infrastructure projects, and our ‘have a go’ exporters need support on the ground to help them break into new markets.

“The government simply cannot divert attention away from growth, and must adopt measures to foster an enterprise-friendly environment in which businesses can continue to create jobs, invest and export. Only by doing this will we encourage the optimism and move our economy forward from good to great.”

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