Growth slows ahead of January VAT increase

UK economic growth ‘sluggish’

Economic growth in the third quarter has been described as "considerably slower" than in previous quarter by the British Chambers of Commerce (BCC), as reported by the BBC.

The BCC has warned that businesses face significant challenges over the next months, not least with the VAT rise in January.

The British Retail Consortium said retail sales growth slowed last month, seeing like-for-like sales up 0.5 per cent from the same period last year – a reduction on that seen in August. BRC director general Stephen Robertson said that there was so far little indication that shoppers were making expensive purchases early to beat the VAT rise.

David Kern, the BCC’s chief economist, urged the Bank of England to consider additional measures to help the economy.

He said:"The MPC [Monetary Policy Committee] should seriously consider increasing the quantitative easing programme to £250bn (from £200bn) before the end of 2010 to enhance the economy’s ability to cope."

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