While the recession may be coming to an end, prospects for economic growth may be hampered by the public deficit.

Economists predict the latest Office for National Statistics (ONS) figures will reveal public sector net borrowing of around £4.9bn, totalling £46bn for the first four months of the financial year.

David Kern, chief economist at the British Chambers of Commerce (BCC), says: “The further improvement in retail sales confirms our assessment that the recession is ending. However, any recovery is likely to be weak and fragile.
 
“The worse-than-expected public sector deficit emphasises the huge scale of adjustment that the UK is facing over the next few years. While it is impossible for the government to properly tighten spending when the economy is weak and unemployment soars, a clear medium-term plan must be formulated to illustrate how the public finances will be returned to health.”

Ian Wolter, chairman at social care staffing firm Eden Brown, told Recruiter: “You have increasing demand created by crisis situations for carers for older people, colliding with local authority and public sector organisations having funding reductions.

“There is an increasing polarisiation between the ‘must haves’ and the ‘nice to haves’. Even with the local authorities, social care will have to take precedence over all sorts of services. Organisations are going to have to make choices.”

Grant Morris, managing director at retail recruiter Elite Associates, adds: “Those in jobs have money in their pocket. As time goes on they will go from a ‘I have got to save’ mentality to ‘I have got all this money and I am going to spend it’ mentality. I think retail sales will go up.”