Chambers again slashes UK’s growth forecast

By KRISTY DORSEY
Published on 07/03/2013 00:00

PRESSURE for a “Budget for growth” are continuing to mount after one of the UK’s biggest business networks cut its economic forecasts for the second quarter in a row.

In a report out today, the British Chambers of Commerce (BCC) slashed its growth forecast for the current year from 1 per cent to just 0.6 per cent, and further trimmed its 2014 forecast to 1.7 per cent, from 1.8 per cent.

Degenerating prospects for the global economy, plus the on-going need to repair Britain’s finances, were blamed for the latest cuts.

BCC director-general John Longworth renewed the group’s call for “decisive action” by George Osborne on 20 March. The Chancellor’s Budget must make “a serious effort to deliver on the many promises already made,” he added.

“This requires a focus on implementing measures that will boost growth, such as the movement of the business bank from rhetoric to reality, increasing the availability of access to finance, and delivering key infrastructure projects that will raise the confidence of businesses on the ground,” Longworth said.

The BCC’s 2013 growth forecast of 0.6 per cent is by far the lowest of those produced to date by the major business and economic groups.

The CBI predicts UK gross domestic product (GDP) will rise by 1 per cent this year, while the Organisation for Economic Co-operation & Development (OECD) has pencilled in an increase of 0.9 per cent. Forecasts used by the UK government are predicting growth of 1.2 per cent.

The BCC expects growth to return to 2.2 per cent in 2015.