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Entrepreneurs warned ‘recovery will be slow’

Britain’s return from the brink of economic catastrophe will be slow and unsteady on a road full of pitfalls, North East entrepreneurs have been warned.

The country’s recovery has already begun but improvement will be in fits and starts, according to a leading senior economist.

Mark Berrisford-Smith, who has worked with HSBC bank for 30 years, was in the region as a guest of the Entrepreneurs’ Forum.

Although he said Britain was now in a “recovery story”, he predicted it would take years for the economy to emerge fighting fit from recession.

“It’s not over until you are back to where you were when it started, and that could take three to four years,” he said.

All the good work that had been done to create a strong economy between 2005 and 2008 had been wiped out, he told around 200 Forum members and guests in Gateshead.

“My guess is it will be 2012 before the patient is back to something like his old self and ready to go home, and even then he will be told not to go back to a party lifestyle.

“Are we in or out of recession? Compared with where we were a year ago, there’s a vast improvement. The policy makers deserve a few hearty slaps on the back. Getting back from the brink was no mean feat. Now it’s all about recovery.”

Recent positive evidence includes figures that show house prices in the last six months have risen on average by five per cent and statistics from the British Retail Consortium this week indicate the best Christmas for eight years on the high street.

Mr Berrisford-Smith warned the entrepreneurs that, in recovery, Britain was heading into the economic unknown.

“Basically we tore up all the rule books which said the government must balance the books and you don’t bail out banks because that encourages others to take risks.

“The big issues confronting policy makers now are when do governments start to put the finances back in order? When do you cut spending and how quickly? If you do it too quickly you run the risk of making things worse; if you start now you could end up having another recession.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .