Chamber reacts to UK recession
A leading business figure in Coventry and Warwickshire says a deep economic drop was inevitable in the midst of the Coronavirus crisis.
And Louise Bennett, the chief executive of the Coventry and Warwickshire Chamber of Commerce, says bold action is needed to help restore confidence and build on a rise in economic output in June.
The UK economy officially entered recession after a 2.2 per cent drop in GDP in the first quarter of 2020 followed by a massive fall of 20.4 per cent in the second quarter as the country was in full lockdown.
The figures also show that the economy actually grew in June by 8.7 per cent as lockdown measures were eased.
Bennett said the shape the economic recovery will take is unclear and will be impacted by major events such as a potential second wave of Coronavirus and the striking of a trade deal with the EU before the end of the transition period.
She said: “It isn’t flippant to say that the UK entering recession was to be expected, it was inevitable when you consider the position the country was in, particularly at the end of March and in April.
“The crisis has caused the deepest recession of our lifetime although we can see from the figures that the economy grew in June – probably due to the pent-up demand after lockdown.
“We have to be cautious in thinking that this is the start of a sustained recovery as there will be many more hurdles to come as some of the support mechanisms for businesses are taken away and we start to see the true impact the crisis has had.
“Of course, a recovery will be affected if we see a second wave while our future trading relationship with the EU will also have a strong bearing on economic growth.
“It’s vital, therefore, that we see further bold action from Government to limit the number of job losses over the coming weeks and months including a reduction in employer National Insurance contributions. Businesses will also require targeted help – especially in the event of further lockdowns either at national or regional levels.”
