Forum of Private Business reacts to latest economy dip

The Forum of Private Business has reacted to GDP figures showing that the economy shrunk by 0.5 per cent in the final three months of 2010 following four successive quarters of growth.

UK government has blamed the bad winter weather for the slump, but the Office for National Statistics (ONS) said that even with the impact of the snow and ice excluded from its latest figures, economic activity would still have been ‘flattish’.

The Forum is arguing that slow movement on policies to improve business finance – including addressing the lack of affordable lending from banks and tackling the £24bn in late payments owed to small firms across the UK – are the real reasons the economy is facing a ‘double dip’ recession, which is defined as two successive quarters of contraction.

In addition, the Forum believes tax rises such as increased VAT and duty on fuel, which is set to rise again in April by 1p, are hitting both businesses and consumers in the pocket.