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Growth predictions slashed by BCC

Contradictory messages have come out of the BCC today, after CBI predicted on Thursday that the UK economy would improve in the second half of 2012 and into 2013.

BCC have announced the economy will shrink later this year in its forecast for the third quarter, although businesses will remain resilient.

Revision of BCC predictions have seen the growth forecast reduce from +0.1% to -0.4% for 2012, while next year’s forecast was downgraded from 1.9% to 1.2%.

John Longworth, Director General of the BCC advised a new model economy for Britain, as well as measures for long-term growth such as a state-backed bank, large-scale infrastructure investment and a boost to exports.

Mr Longworth said the interests of UK businesses needed to be addressed. He commented: “Since the election of the Coalition Government, the BCC has supported deficit reduction, and a relentless focus on creating the conditions for businesses to thrive.

“Two years on though, the UK economy is stagnating, with headwinds from a slowing global economy, difficulties in the eurozone, pressure from domestic austerity measures, low business investment and volatile commodity prices all bearing down on our growth prospects.”

Predictions for manufacturing output are positive, as increases of 0.9% in 2013 are expected, while construction will perform poorly in 2012 but improve by a modest 0.9% next year.

The service sector will perform strongly with continued growth of 0.7% this year, 1.2% in 2013 and 2.6% in 2014.

Mr Longworth continued: ““Business wants a hybrid strategy that delivers both deficit-reduction and growth.

“This means a continued commitment to public spending cuts, support for the economy without a new and damaging consumer credit bubble, as well as a strong push to improve business access to finance and unlock massive private funding to renew Britain’s infrastructure.”

This was posted in Bdaily's Members' News section by Miranda Dobson .