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In a speech entitled “Sustaining the Recovery” the Deputy Governor of the Bank of England, Charlie Bean, has been summarising some of the key issues which still need to be addresses for a sustained recovery. Noting that “much of the recovery has been on the back of higher consumer spending and housing investment,” Charlie Bean highlighted three factors which he believes are key to recovery success, namely: “business investment needs to pick up, a revival in productivity growth and an expansion in net exports”.
In the speech which was given to the North East Chamber of Commerce, Mr Bean acknowledged that business investment had started to pick up but that productivity and export growth still had some way to go. By coincidence, the British Chambers of Commerce have today upgraded their GDP forecasts from “2.7% to 2.8% in 2014 and from 2.4% to 2.5% in 2015.” As part of this forecast the BCC are now predicting that GDP will match its pre-recession peak in the second quarter of this year.
Acknowledging the efforts which British business have put into creating the recovery the BCC still highlights youth unemployment, the current account deficit and business investment as major issues. In advance of the Budget next week, the BCC urges the chancellor to take the opportunity to incentivise “businesses to hire young people so that the next generation of workers are not left behind.”