The Office for National Statistics (ONS) has released its latest Quarterly Gross Domestic Product (GDP) figures with first estimates suggesting that the economy grew by 0.4% quarter on quarter in April to June (equivalent to a 1.3% year-on-year increase).
Commenting on the results Markus Kuger, Senior Economist at Dun & Bradstreet said “Today’s data release is in line with Dun & Bradstreet’s expectations of a gradual – albeit very modest – recovery, and we have therefore upgraded the market environment outlook from ‘deteriorating’ to ‘stable’. However, we are maintaining our ‘deteriorating’ overall country risk outlook for the UK given the plethora of downside risks: these range from poor payments performance, higher-than-normal insolvency risk (highlighted by recent developments at House of Fraser), sluggish productivity and wage growth and, most importantly, the lack of progress in Brexit talks.”
Martin McTague, Federation of Small Businesses (FSB) Policy Chairman said “We’ve seen confidence among small firms rise over the past two quarters and it’s good to see that positivity reflected in today’s figures.
“Lots of small retailers, pubs and restaurants will have seen sales rise in the past three months thanks to a good World Cup run and a royal wedding. But we need to remember that, over the long-term, these firms are facing a perfect storm of high employment costs and rising business rates.
“Small exporters have been consistently bullish over the past year, thanks in part to a weaker pound. The widening of the UK’s trade deficit throughout the second quarter of 2018 is concerning though.
“With this in mind, it’s crucial that, as we enter a pivotal few months for the Brexit negotiations, it is essential a framework for the future partnership is agreed with the EU, including trade, which can benefit the whole of the UK economy. We must be proactive to ensure that businesses have the support that they need to withstand the uncertainty that will exist until negotiations are concluded. Our entrepreneurs are under pressure from increasing costs relating to employment, rent, and tax including business rates.”
“The strength of the UK’s economy rests on helping more small firms to export, and increasing the potential of existing exporters. Central to this is ensuring that there is a good long-term trading relationship with our export partners as well as providing greater support to smaller firms. “The forthcoming Government export strategy will play a critical part in providing this support to smaller businesses. Key incentives such as export vouchers and grants should be made available to small businesses to support their supporting activity.”