If you were hoping that the economy was on its way to making a full and concerted upturn, well those hopes will be dashed as it seems the recovery will be drawn out and anaemic, according to the Ernst & Young Item Club. Moneyfacts has reported that the well respected group has said that a ?a temporary boost from a series of policy and other dynamic effects? will see the statistics for the gross domestic product (GDP) likely to improve during the second half of the year.
The group said that firms are taking action: ?Companies that took emergency action to cut output and stocks as credit dried up this time last year are now rebuilding them. The scrappage scheme is taking effect in the car industry, while in the new year the increase in VAT (and the end to the stamp duty holiday) will surely bring forward spending (and housing transactions) into the fourth quarter of the year.?
However, with an upturn in GDP figures struggling to reach just 1 per cent in 2010, any considerable growth that does occur will be short lived. This is thanks to consumer spending being held back due to limited credit lines and a weak housing sector making the problem bigger than it should be.
However, despite all the bad news surrounding the economy?s upturn, Ernst & Young?s forecast has said that business confidence is increasing. This is a positive trend that BT Business research confirmed, after it found that 75 per cent of firms surveyed expected to see some sort of improvement next year.
