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Britain 'on the brink of economic recovery'

Three surveys have pointed the way towards a full UK economic recovery.

But there are warnings about the fragility of the economy and the danger of slipping back into recession.
 

The British Retail Consortium said retail sales rose at their fastest annual rate in five months in September; figures from the British Chambers of Commerce showed the decline in Britain's manufacturing and services sectors eased in the third quarter and a survey from the Royal Institution of Chartered Surveyors suggested house prices are rising at their fastest pace since the credit crunch began.

The BRC said the value of like-for-like sales rose 2.8% in September compared with a year ago, the biggest rise since April.

The value of total sales was 4.9% higher than a year ago, also the biggest rise since April.

The Royal Institution of Chartered Surveyors said 22% more surveyors reported price rises in the last three months than price falls, the highest since May 2007.

The findings tally with surveys from mortgage lenders which show that a combination of record low interest rates and limited supply are helping property prices reverse some of last year's losses.

Figures from the Halifax last week showed prices have risen almost 6% since April.

However, they are still nearly 5% lower than in September 2008 and economists have warned the recovery could go into reverse should interest rates rise.

In its quarterly survey of 5,500 firms, the British Chambers of Commerce said the pace of decline in domestic sales and orders was its slowest in more than a year.

However, it warned conditions remained fragile and that after news last week of an unexpectedly sharp fall in industrial output in August, the economy stagnated or even continued to shrink in the third quarter.

BCC chief economic adviser David Kern said: “The critical question is what happens in the middle of 2010, when the stimulus and inventory effects have worn out.

"There is a real risk of a double dip because there is still a question mark over consumer spending, investment and exports.” (Reuters)
 

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