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Firms See Economy Deteriorating

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http://www.bbc.co.uk/news/business-15252840

The UK economy deteriorated in the third quarter and is showing signs of stagnation, according to the British Chambers of Commerce (BCC).

The BCC says cashflow remains a real concern for many of the 6,700 businesses it surveyed.

Its director general, John Longworth, said recession could be avoided, but only through making "tough choices".

The BCC has downgraded its forecast for UK economic growth three times.

Its expects the economy to expand by just 1.1% in 2011, compared with 1.9% at the start of the year.

Last week, official figures showed the UK economy grew by 0.1% between April and June, less than the 0.2% estimated previously.

The Office for National Statistics also revised down growth in the first three months of the year from 0.5% to 0.4%.

Slow recovery

The BCC said the domestic market, exports, confidence, cashflow and investment in plant and machinery had all weakened over the past three months.

The balance of manufacturers creating new jobs fell, while in the services sector there was only a marginal increase in employment. There was little optimism in either sector about future recruitment.

Mr Longworth said: "The pace of the UK recovery will remain slow. We can avoid a recession but this relies on the government making some tough policy choices.

"While it is imperative that the government perseveres with its deficit-cutting plan, there must be a significant reallocation of priorities within the overall spending envelope."

Sales 'weak'

Meanwhile, a separate survey from the British Retail Consortium (BRC) showed some retailers were hard-hit by the unusually hot weather last month.

Clothing retailers - which are currently offering clothes for autumn and winter - saw their biggest sales drop in two years, although food sales were helped as people stocked up on goods for the barbecue.

However, overall like-for-like sales were up by 0.3% in September from a year ago.

For the July to September quarter, non-food sales were down 1.4% while food sales rose 2.1%.

Stephen Robertson, the BRC's director general, said: "In these harsh times, we have to be thankful for this minor improvement in growth compared with August but underlying conditions remain weak.

"Spending growth is below inflation meaning customers are buying less than this time last year. And there's no guarantee next month's figure will be better."

On Monday, a separate survey from accountancy group BDO also found that the recent hot weather had hit UK retail sales.

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Anecdotally, I've been talking to a few friends who run their own businesses, from web design companies to car dealers, and they've all to a man reported a sharp halting of business in the last 4-6 weeks.. it's not looking rosy out there for them.

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Anecdotally, I've been talking to a few friends who run their own businesses, from web design companies to car dealers, and they've all to a man reported a sharp halting of business in the last 4-6 weeks.. it's not looking rosy out there for them.

All down to the warm weather...

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Anecdotally, I've been talking to a few friends who run their own businesses, from web design companies to car dealers, and they've all to a man reported a sharp halting of business in the last 4-6 weeks.. it's not looking rosy out there for them.

We've been extra busy....the bread and butter is cut right back, but an old client came back after 4 years to expand their storage and a landlord who cant rent his near vacant estate decided to make a large unit into storage, promising to do another very soon.

Now we wait to see what October will bring.

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Anecdotally, I've been talking to a few friends who run their own businesses, from web design companies to car dealers, and they've all to a man reported a sharp halting of business in the last 4-6 weeks.. it's not looking rosy out there for them.

Not seeing that myself. We do web and mobile builds and have never been busier. We are trying to hire more AS3 and/or C devs but they are thin on the ground at the mo and a lot of our usual emergency freelancers are also far too busy.

(edit: probably worth mentioning that our clients are all international entertainment companies and currently 70% of the projects we are working on originate from either USA or Japan)

(edited again to add: i ♥ weak sterling)

Edited by majestic whine

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Our business continues to grow slowly however weekly orders swing wildly - 20% either way from a mid-point. Business has certainly got more unpredictable of late.

I must admit I am not hearing many squeals of pain from customers just yet and my business is generally one of the first to suffer from weak economies and/or lack of confidence.

I don't expect it to stay this way though.

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Anecdotally, I've been talking to a few friends who run their own businesses, from web design companies to car dealers, and they've all to a man reported a sharp halting of business in the last 4-6 weeks.. it's not looking rosy out there for them.

My business (dealing exclusively with large, international companies mainly US based) has got very little new business over the past few months. Its not a problem as we have long term contracts with cover our costs. However, its a sign that business are scared to spend money.

Edited by Peter Hun

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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