Business leaders in Coventry and Warwickshire say it comes as no surprise that the economy contracted slightly in May.
The latest GDP figures showed a 0.1 per cent fall in May compared to 0.2 per cent growth in April – with no overall growth in the three months to May.
Corin Crane, chief executive of Coventry and Warwickshire Chamber of Commerce, said: “The figures bear out the message we are getting from firms across our region and it is only thanks to the hard work of businesses and their staff that we are avoiding recession because conditions are tough.
“We know from our own Quarterly Economic Survey that the economic outlook has dipped and, also, from regular conversations we have with businesses that there are several factors holding back growth.
“Inflation and the rise in interest rates, as well as the tightness of the labour market, are making it difficult to grow so it is no surprise that the wider economy remains flat.
“That’s why it is vitally important that we get short, medium and long-term plans in place to get the economy growing at sustainable rate and that businesses are given the right conditions to flourish.
“As ever, I would urge firms across Coventry and Warwickshire to utilise the Chamber and seek support whether they are in survival mode or whether they can see opportunities for growth.”
David Bharier, Head of Research at the British Chambers of Commerce, said: “Today’s GDP figure showing 0% growth in the three months to May provides further evidence of the precarious state of the UK economy. While businesses have been incredibly resilient in stomaching multiple waves of economic crises, our latest Quarterly Economic Survey shows that most firms are still not reporting improved business conditions.
“Positively, slightly fewer businesses report inflationary pressures, but interest rates have grown as a concern for businesses. We are starting to see more businesses report rising borrowing costs, but we are yet to understand the full impact of rising interest rates.
“Businesses are operating in a climate with a high degree of uncertainty and government and Bank of England policy both need to be very responsive to developments.”