Recession, what recession?

According to the latest Accountancy Age/Reed Accountancy Personnel’s Big Question 51% of more than 300 UK FDs polled agreed recession would not strike this year.

The views are in stark contrast to research from the National Institute of Economic and Social Research that found GDP in the UK saw no growth in the last quarter of 2001.

This would be the first time the economy had stopped growing for nine-and-a-half years.

Although FDs noted economic problems they remained upbeat.

Jeremy Grove, a partner at Spofforths, said: ‘It is still very buoyant at the moment.’

JM Hickey, FD at Buchanan and Curwen, said he had personally seen no signs of recession.

Many FDs felt that with the US economy emerging from recession and with interest rates being handled carefully, the UK would pull through. One commented: ‘As the year progresses, the US economy will improve, and have a knock-on effect on our economy. Recession will look less likely as time goes on.’

Bank of England governor, Sir Eddie George, has been playing down predictions of more interest rates rises.

Just over a third of finance directors, 34%, said that the UK was bound for recession, a view that echoes current research.

But even the most pessimistic of FDs argued the UK would still not be hit hard. One said: ‘It will not hit as hard as people think, though smaller companies may struggle.’

Robert Dearing, FD of a Twickenham plating group, predicted the economy would have ‘some form of soft landing before it gets better.’

However, there was wariness about talking about recession at all. One FD said: ‘The main danger is us talking ourselves into a recession. This administration is telling us to spend, spend, spend so we have and now Eddie George is warning of inflation.’