Business chiefs issue warning over “sluggish” growth

Business bodies have voiced concern about the UK’s slump in growth.

It was confirmed earlier this week that GDP grew by just 0.4 per cent in the first quarter of 2016, down from 0.6 per cent in the final three months of last year.

The increase was broadly in line with what economists had projected and it’s thought that the slump in the construction and manufacturing industries has played its part.

David Kern, the chief economist at the British Chambers of Commerce, said there was mounting evidence that the economy was “softening” and argued that ministers needed to be working on a forceful policy response.

“Services remain the main driver of UK economic growth, but firms are becoming more cautious before making long-term investment decisions,” he said.

“The Government must remain focused on the task of boosting economic growth. We need more infrastructure investment and support for our exporters to create wealth and drive the economy forward.”

Mike Cherry, national chairman at the Federation of Small Businesses (FSB), said the situation was “concerning” for the organisation’s members.

“This sluggish performance in the UK is being compounded by uncertainty over the health of the global economy. Recent FSB research found small business confidence at its lowest level since 2013,” he said.

“Small firms are dealing with a series of challenges including adjusting to the new National Living Wage and auto-enrolment on pensions.

“In this climate, our members are looking to policymakers to focus on reducing barriers to enterprise and creating the right environment for small firms to grow.”