Mixed messages for UK small biz

The British economy is showing some signs of recovery, but January's fall in retail sales is a sign that any recovery is weak and still needs help from government and low interest rates.

Figures from the Office of National Statistics showed sales fell in January by 1.8 per cent compared to December.

David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: "A decline in January’s retail sales was predicted because of weather-related disruption, but the fall was worse than expected, and December’s figure was also revised down. British retailers are obviously facing difficulties, and there is no significant sign that the economic recovery is gathering momentum."

He said the risk of a double-dip recession remained serious, and the government should maintain its easing programme and keep interest rates low.

Meanwhile, figures from Experian showed a drop in the number of business insolvencies - down to its lowest level since June 2007. Seven in every 10,000 businesses went bust in January 2010, compared to nine in every 10,000 firms going titsup in January 2009. The firm said it was too early to call an end to the recession, but the figures did suggest some improvement. ®