UK to avoid triple dip recession

Britain will avoid a triple dip recession thanks to near record levels of exports from the powerhouse services sector, according to the British Chambers of Commerce.

Weak pound boosts demand for UK exports

The pound has fallen against the dollar and euro this year. Credit: PA

The ONS said service sector output increased by 0.8% in January on a year earlier and was up 0.3% month-on-month, despite the snow impact at the start of the year.

It is hoped that this solid performance will offset woes in the construction and manufacturing sectors.

Increased demand for exports has been helping, boosted by the recent weakness of the pound, which makes it cheaper to buy British goods and services.

The BCC's survey showed improvements in both the manufacturing and services sectors, although employment had weakened.

BCC: ONS has 'exaggerated' economic weakness

David Kern, British Chambers of Commerce chief economist, said the results suggested the economy continued to grow in the first three months of 2013.

He added:

The survey reinforces our assessment that recent gross domestic product (GDP) figures published by the Office for National Statistics (ONS) have exaggerated the weakness of the UK economy and the volatility in output.

If an announcement of negative growth in the first quarter is misleadingly described as a triple-dip recession, confidence will again be damaged unnecessarily.

He admitted the survey showed the UK's economic performance was still "inadequate", but confirms areas of strength.

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UK will avoid triple dip, says business group

Britain's services sector will save the country from another recession, according to the BCC. Credit: PA

Britain will avoid a triple dip recession thanks to near record levels of exports from the powerhouse services sector, a business group said today.

The latest economic survey from the British Chambers of Commerce (BCC) revealed export deliveries and orders from the services sector - which accounts for more than three quarters of UK economic output - rose close to the all-time highs seen in 1994 during the first three months of 2013.

Its survey of more than 7,000 firms also found that business confidence had grown, while firms were looking to invest more in their businesses.