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Herald View

SCOTTISH Chambers of Commerce chief executive Liz Cameron has provided a timely reminder about the continuing fragility of economic recovery.

And David Kern, chief economist of British Chambers of Commerce (BCC), has also sounded a warning that the UK recovery could stall.

The tone of their comments, in the BCC's latest economic survey today, contrasts with the Budget day triumphalism of Chancellor George Osborne last month.

Mr Kern noted that the BCC's latest survey pointed to solid growth in the UK economy.

But he warned growth was still unduly reliant on consumer spending, driven by a buoyant housing market and a falling savings ratio.

Inflating the housing market ahead of the 2015 General Election became a key plank of the UK Government's economic strategy last year, with a raft of measures unveiled, after Mr Osborne's vision of "a Britain carried aloft by the march of the makers" failed to turn into reality.

Shares in major UK housebuilders took a tumble yesterday, amid talk that rising property prices could result in a housing market bubble and speculation that mortgage providers might rein in their lending in this environment.

The potential for trouble is greater in some parts of the UK than others, notably in London and south-east England.

Risks inherent in the Government's determination to boost the housing market may not crystallise before the next election. However, with business investment and exports having failed to contribute to recovery as Mr Osborne had hoped, we must not overlook the dangers.

Contextual targeting label: 
Finance

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