Little sign of a UK recovery on horizon as negative forecasts cloud economic outlook
The fragility of the UK recovery has come into sharp focus once again as a raft of economic surveys, data and forecasts cloud the outlook.
Britain's economic growth will lag behind five of the G7 countries in the second quarter of this year, only outperforming disaster-struck Japan, according to a sobering report from influential think-tank OECD.
Elsewhere, the British Chambers of Commerce (BCC) said a poll of 6,000 firms revealed "worrying" evidence about the stability of the UK recovery.
The reports were published against a backdrop of surging oil prices, and ahead of the start of the new fiscal year tomorrow - when higher rates of tax will be introduced.
But there was a glimmer of hope as a key survey revealed the powerhouse services sector grew at its fastest rate for more than a year in March, which suggests the wider economy would have bounced back in the first quarter of 2011.
The OECD estimates the UK's gross domestic product will grow by an annualised rate of 1% in the second quarter, compared with its previous forecast of 1.3% in November.
This puts the UK behind the G7 group of richest nations - except for Japan - which are expected to grow by an average annualised rate of 2.9%. The US economy is expected to expand by 3.4%, followed by France at 2.8% and Germany by 2.3%.
While the BCC's survey revealed the economy had returned to growth in the first quarter of 2011, after its shock 0.5% decline in the final three months of last year, improvements were "slight and still inadequate".
The UK is experiencing sluggish growth as soaring inflation squeezes household incomes and pulls back consumer spending power.
Cost pressures mounted yesterday as oil prices hit a record high in sterling terms. The impact of the weaker pound, which declined 17% in value in the past two years, means the value of Brent crude oil has risen to £74.60 per barrel.
The surge, triggered by unrest in Libya, among a number of other factors, is likely to be passed on to consumers at petrol pumps, adding more misery to already tight household budgets.