The British Chambers of Commerce (BCC) has warned that the UK’s economic recovery could still stall if growth continues to rely on consumer spending with personal debt levels that are “too high”.
The BCC’s most recent economic survey said that UK export orders and sales in services were at all-time highs, whilst manufacturing grew consistently in the first quarter.

Chief economist at the BCC David Kern said: “The upbeat results of our new survey, coupled with positive economic indicators, suggest that the economy is continuing to grow at a solid pace. But, in spite of this impressive progress, the recovery is not yet secure. UK growth is still unduly reliant on consumer spending, driven by a buoyant housing market and a falling savings ratio.

“The very large current account deficit also poses risks. Since UK personal debt levels are still too high and must fall further, it will be difficult to sustain the current pace of growth in the medium term without structural changes in the economy. Though personal consumption must play an important role in the recovery, unless investment and net exports can make a bigger contribution to growth, there is a risk that the recovery will stall. The strong export and investment balances in our survey confirm that business is ready to play a major role in growing and rebalancing the economy. But the government and the MPC must help create the necessary conditions for this to happen.”