Dated: 24 November 2010
Commenting on today’s unchanged ONS estimate of GDP figures for Q3 2010, Graeme Leach, Chief Economist at the Institute of Directors, said:
“Today’s numbers reaffirm our belief that the economic recovery will take the shape of a square root sign, with economic activity levelling off in 2011 after a normal a cyclical upturn in 2010. The driving force for the levelling off in activity will be the erosion in real take home pay, the already low value of the savings ratio and continued de-leveraging in the banking system. These are very strong headwinds which suggest that the best of the recovery may be behind us.
“One possible plus factor is that the corporate sector is sitting on a pile of cash which indicates business investment may recover strongly. However, we think that demand uncertainty remains high and this will inhibit growth as compared with previous recoveries.”