'Disturbing weakness' threatens recovery

The British Chambers of Commerce (BCC) said that the results of its research indicated the economy was "on the brink of leaving recession", but said it did not see any significant growth in the fourth quarter of 2009.

While most key national indicators had improved in the last three months of the year, the BCC said progress had been weaker than in the previous quarter and a number of critical measures were still in negative territory.

The survey suggests that both sales and orders within the UK were below expectations and the crucial services sector performed worse than manufacturing in the period.

"The results reveal disturbing weakness facing the service sector; these must be remedied to enable the UK to attain a sustainable recovery," it said.

But businesses in the region are leading the way back towards growth, research also showed.

The Yorkshire & Humber Chambers of Commerce Quarterly Economic Survey asked 645 businesses in the region about their performance between October and December 2009.

It shows that sales returned to positive territory for the first time since the recession began and the region's service sectors were more optimistic about their future prospects than in any other part of the UK.

There were also improvements in order books and exports, and the number of firms cutting jobs is half the figure at the start of the year.

Nationally, the BCC said the results do contain some positive features, with strong improvements in employment and exports in the manufacturing sector.

It said confidence was also improving and businesses were showing resilience.

But the business group called for further support measures "to sustain recovery and avert a dangerous relapse".

These included the avoidance of additional business taxes and the scrapping of a 1 per cent increase in employer National Insurance contributions.