Hopeful signs but put bubbly on hold (From Business in Dorset)

Hopeful signs but put bubbly on hold

8:00am Tuesday 27th July 2010

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We seem to have had some positive news in that the preliminary GDP (gross domestic product) estimate for the second quarter of 2010, published by the ONS (Office for National Statistics), sees a 1.1 per cent increase in GDP for the second quarter, against a 0.3 per cent rise for the first quarter.

However, it seems reading between the lines that some features within these figures are puzzling, particularly the exceptional 6.6 per cent growth in construction given the weak state of the housing market.

But overall the figures are very welcome and show that the UK recovery is gathering momentum.

We must not forget that these positive results do not yet take into account the impact of the tough measures announced in the emergency budget.

The economy is still weak, businesses are struggling, and the full impact of the budget’s austerity measures are yet to take effect... so let’s not get the Champagne bottle on ice just yet!

It will be very dangerous if interest rates start rising just when the budget measures take hold. Businesses are still facing huge pressures and it is important for interest rates to remain as low as possible for as long as possible.

Ernst & Young, the auditors, expects the Bank of England to hold key interest rates at their current 0.5 per cent until 2014.

This, with stronger than expected retail sales figures for the last quarter, which may have been artificially inflated by World Cup-related spending.

It seems that we should welcome the recovery in consumer spending but there is still no room for complacency.

• On Monday, July 12, Dorset Chamber and its members joined forces with Lewis-Manning Hospice to attempt the Guinness World Record for sandcastle building and went on to enjoy a barbecue at Sandbanks Beach Marquee.

The record was broken with an impressive 539 sandcastles built in just under an hour while £600 was raised for the hospice.

During the current economic climate, it just goes to show that when given a challenge, Chamber members are always keen to get involved and lead in success.

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