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BCC cuts 2012 growth forecast

BCC cuts 2012 growth forecast

Category: Economy

Updated: 01/06/2012
First Published: 01/06/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The British Chambers of Commerce (BCC) has cuts its growth forecast for the UK economy.

The business group says that it believes the UK will register minimal growth of 0.1% this year, significantly down from the previous prediction of 0.6%.

Growth in quarter two of this year is likely to be zero – or even slightly negative – due to the additional bank holiday for the Diamond Jubilee, although growth is set to improve in Q3.

By contrast, the BCC has increased its prediction for the economy in 2013.

It has upped its forecast from 1.8% to 1.9%, and then expects the UK to grow by 2.3% in the following year.

John Longworth, director general of the BCC, said the new forecast underlines the need for bold action to deliver growth.

"We want to see measures like the creation of a business bank, which would provide capital to new and growing companies; real domestic deregulation, and a moratorium on new European regulation that hinders businesses; and clear, long term strategies on aviation and energy to deliver more certainty to supply chains and investors," he added.

"All of these measures that can be achieved while sticking to the aims of deficit reduction and crucially, maintaining the UK 's market credibility."

Amongst its other predictions, the body said it expects UK unemployment to increase to 2.9 million by the third quarter this year – equivalent to 9% of the nation's workforce.

It went on to forecast that the Bank of England base rate of interest will rise to 0.75% by the end of 2013, and to 1.25% by the second quarter of 2014.

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