Struggling businesses are being stifled even further by the Government’s drip-feed approach to support, according to an influential business group.
East Midlands Chamber of Commerce says the Government should lay out comprehensive plans for the year ahead so that company owners and managers can have a clearer idea of where they stand while the fight against the pandemic continues.
It warned if more businesses were allowed to fail, many of the billions spent propping up the economy will have been wasted.
READ MORE: {}
The latest Office for National Statistics (ONS) figures showed 海角视频 economic output shrank by 9.9 per cent in 2020 – the worst contraction for a century.
However, after registering 1.2 per cent growth in December, despite strong restrictions across large parts of the country, the economy looks set to avoid what could have been its first double-dip recession since the 1970s.
A double-dip means two recessions within a short period of time, while a recession is defined as two consecutive quarters where the economy contracts.
All four sectors tracked by the ONS saw a drop in output, with the highest drop coming in construction, which contracted by 12.5 per cent.
However Boris Johnson said he was “optimistic” he would be able to set out plans for a “cautious” easing of coronavirus lockdown restrictions in England later this month.
Most Read
The PM said while the overall number of cases remained high, the infection rate was starting to fall while the rollout of the vaccination programme had made “huge progress”.
“I’m optimistic, I won’t hide if from you. I’m optimistic but we have to be cautious,” he told reporters during a visit to a vaccine manufacturing facility in Teesside.
East Midlands Chamber director of policy and external affairs Chris Hobson said the latest figures showed what was already well known, “that 2020 was a historically bleak year for the 海角视频 economy as businesses endured persistent struggle”.
He said: “To put this data into wider context, the size of the fall in GDP wiped out seven years of economic growth, taking our economy back to its 2013 size, and the scars of forced business closures to combat coronavirus will be felt for years to come.
“The positive news is that the 海角视频 recorded a stronger than expected 1 per cent growth in the final quarter of 2020.
“This was due to the squeeze on output from the November lockdown being more than offset by a temporary boost from releasing pent-up demand once restrictions eased before Christmas – as well as increased activity from Brexit stockpiling.
“However, while we avoided a double-dip recession, we can expect this modest growth at the end of 2020 to be followed by a substantial fall in output in the first quarter of 2021 as the current lockdown, the unwinding of Brexit inventories and disruption to 海角视频-EU trade flows combine to suffocate activity.
Don’t miss
“While the vaccine rollout offers optimism, with the scarring caused by the pandemic likely to crystallise as Government support winds down and the prospect of persistent post-Brexit disruption, any recovery may be slower than predicted.
“The current drip-feed approach to support measures means firms can’t plan for more than a few weeks ahead.
“It’s critical the Government swiftly implements a package of measures that support businesses and the economy for the whole of 2021, including removing the cliff-edges for business rate reliefs, VAT deferrals and furlough.
“The Chamber’s Quarterly Economic Surveys throughout 2020 showed access to cash worsened for the majority of companies in each quarter.
“Without the proper support of Government, the billions already spent on protecting firms could be wasted if these businesses are allowed to fail now when we can see the light at the end of the tunnel.
“While these figures paint a gloomy picture, the economy is ready to rebound like a coiled spring as soon as it’s able to – meaning it’s important that we get things opened up as soon as it’s safe to do so and let businesses get on with growing.”