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UK Economy

“Half of Welsh firms fear they won’t survive the next year”

“HALF of Welsh businesses fear they will not survive the next year if the economy does not pick up dramatically.

Worrying research suggests that nearly two thirds of firms are not expecting a full economic recovery for two years or more.

And a leading Welsh economist last night warned of more uncertainty if unemployment levels follow growth trends that have seen a near stagnation in the UK economy this year.

The study, by business insurance firm QBE, also found that 65% of businesses in Wales expect it to be two years or more before a full economic recovery, with 36% not expecting a turnaround for three years or more.

Respected Aberdare-born financier and economist Gerry Holtham, said he was concerned that unemployment data – which has shown growth in employment – might start to reflect sluggish output statistics which are showing snail-paced growth in GDP.

This week, the Office for National Statistics said the UK economy grew by 0.2% between April and June, compared with 0.5% in the previous quarter.

Year-on-year, the UK grew by just 0.7% in the 12 months to the end of June, which was the lowest rate of growth since the first quarter of 2010.

Mr Holtham told the Western Mail that the economy is still 3-4% below the growth rate it was at when it was peaking around 2007 – and it will take a “couple of years” at least to get back to that level.

It means that the UK economy is now 7-8% behind where it should be if growth was normal at around 2%.”

Original article

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