Chambers of Commerce downgrades growth forecast
THE British Chambers of Commerce has downgraded its prediction for UK GDP growth in 2011 and 2012.
Though growth is expected to be weaker over the short-term, the revised forecast predicts a gradual improvement, and the Chambers warns against unjustified gloom about the UK’s economic prospects.
It forecasts UK GDP growth for 2011 at 1.1% (down from 1.3%); with 2012 GDP growth at 2.1% (from 2.2%). However, this will strengthen to 2.5% in 2013, it said.
Jack Stopforth chief executive of Liverpool Chamber of Commerce, said: “The challenges faced by the UK economy are more difficult than first thought at the beginning of the year. Growth will be slow, inflation will remain high, and the number of those out of work will increase.”
Indeed, unemployment is expected to peak at 2.62m in the final quarter of 2012.
“Despite this, there is no need for doom and gloom. We expect prospects to improve over the medium-term, and believe that the UK has the potential to recover and thrive. But this will depend on creating the right conditions for businesses to grow,” Mr Stopforth added.
“The main drivers of UK growth over the next two years will be net exports and, to a lesser degree, business investment. But the re-balancing of the economy towards net exports and investment is not yet happening at an adequate pace.
“We have to get the economy onto a more sustainable long-term footing, and it is business that will help us achieve that. For the government, that means taking a serious look at the infrastructure that supports our businesses, from the education system to transport links, as well as reducing red tape and reforming the planning system, to allow firms to expand and grow. If we don’t get these policies right, we risk any recovery being weak and short-lived.”
