The British Chambers of Commerce (BCC) has slashed its forecast for economic growth this year, from 0.6% to 0.1%. But the group, which represents more than 100,000 businesses, raised its forecast for 2013 from 1.8% to 1.9%. The data, in the BCC’s latest Quarterly Economic Forecast, follow official figures showing that the UK has returned to recession.
Unemployment will also increase from 2.625 million – or 8.2% of the workforce – to 2.9 million, or 9%, in the third quarter of 2013, driven primarily by continued public sector spending cuts.
The BCC’s report warns that problems in the eurozone will persist for a considerable time and cause difficulties for UK businesses.
However, household spending will see modest improvement, from shrinking 1.2% in 2011 to growth of 0.7% in 2012, 1.7% in 2013 and of 2.1% in 2014.
Business investment should improve, from 1.2% in 2011 to 4.3% in 2012.