Birmingham and Solihull business leaders are urging companies not to underestimate the tough challenges which 2010 will present, despite the Office for National Statistics (ONS) announcement today that the UK has finally emerged from recession.  

Paul Bassi, president of the Birmingham and Solihull Chamber of Commerce (BCI), said the car scrappage scheme and strong Christmas figures have boosted retail sales. 

He said: "The latest GDP figures only show a technical exit from the longest recession since the second world war. Conditions remain tough. Cash flow remains critical and further measures, such as the scheduled increase in national insurance contributions in 2011, won't make trading conditions easier in the medium term. VAT has already returned to 17.5% and businesses should not be lulled into a sense of complacency."

BCI's quarterly economic survey showed that companies are turning more and more to exports for survival.  Mr. Bassi added: "Companies selling overseas are in a strong position, particularly those exporting to Far East Asia."

ONS said the economy had grown by 0.1% between October and December, ending a record six straight quarters of contraction. The UK economy shrank by 4.8% in 2009.