0.3% drop in UK economy will underline fragility of business confidence

Supportive measures and careful costing are needed to lift the confidence of businesses, East Midlands Chamber has said, after the economy contracted 0.3% in April.

The latest estimated GDP figure from the Office for National Statistics was lower than expected by economists and followed growth of 0.2% the previous month.

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Any sign of a shrinking economy will do little to boost business confidence, although a fall should only be a significant concern if a persistent trend. In this case, the drop can be partly attributed to the impact of factors like the tariffs the US announced at that time but any dip is also a reminder to firms of the fine tightrope the economy’s on and the need for supportive measures from political leaders to drive growth.  

“With our Quarterly Economic Survey having indicated fragile confidence among East Midlands firms, including lower expectation of turnover and profitability and investment plans revised downwards, what firms will not want to see is anything that makes trade tougher, like a creeping up of taxes at the next Budget.

“While it’s been encouraging to hear the government’s comprehensive spending review prioritise areas like defence, housing, apprenticeships and training, the next Budget must not be used as a quick fix to pay for those measures.”