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UK 'will avoid recession this year'

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UK is avoiding the recession this year

Any investor who is considering whether or not to will be paying particular attention to economic forecasts right now.

After all, the Office for National Statistics reported that gross domestic product (GDP) went down by 0.2 per cent in the final three months of 2011, thereby raising the prospect of a recession at the beginning of 2012.

But while some remain increasingly concerned about the country's financial outlook, others are relatively optimistic - including some of the UK's most respected business groups.

The British Chambers of Commerce (BCC), for instance, has said the fact the country's retail sales volumes were better than anticipated in January shows the economy is improving. As a result, it is hopeful that GDP will increase during the first quarter of 2012.

However, the BCC acknowledged that factors such as the continuing debt crisis in the eurozone and austerity measures at home represent a serious challenge for the British economy this year.

David Kern, the group's Chief Economist, commented: "Increasing net exports and business investment is crucial to driving recovery in the months and years ahead."

The CBI is also confident the UK economy will return to growth in 2012, albeit at a subdued rate. Estimates from the body suggest GDP will go up by 0.9 per cent this year.

Ian McCafferty, Chief Economic Adviser at the CBI, said it is hopeful of an increase as business sentiment is improving, while the manufacturing sector is also becoming more optimistic.

"There are also tentative signs of a stabilisation in economic activity in the core countries which account for a large proportion of UK exports," he stated.

The organisation is also hopeful that any increase in economic output this year can be sustained in 2013, when it expects GDP to rise by two per cent.

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