LONDON (MNI) – The British Chambers of Commerce expects modest
growth in 2013 and 2014, with the economy shrinking marginally this
year.
The BCC has raised its 2012 GDP forecast to -0.1% from -0.4% in its
September forecast round, and has cut its 2013 prediction to 1.0% from
1.2% and its 2014 forecast to 1.8% from 2.2%. It warns that with the
public finances disappointing, further austerity will likely be needed.
The cuts to the BCC’s growth forecasts come just a day ahead of
Chancellor of the Exchequer George Osborne’s Autumn Statement, a mini
budget which will be based on the latest forecasts from the Office for
Budget Responsibility.
The OBR is also expected to cut its growth forecasts. The OBR’s
most recent forecast for growth this year was 0.8%, with 2.0% growth in
2013 and 2.7% in 2014.
The BCC predicts public sector borrowing this fiscal year, 2012/13,
will be stg104.1 billion, stg12.1 billion above the OBR March’s
forecast.
The BCC said it had cut its growth forecasts for the next two years
because of the likelihood of additional fiscal austerity measures and
due to the worsening international environment.
“It is clear that UK economic growth remains weak and inadequate.
The economy has been stagnant over the past year, and has only seen
minimal growth since the autumn of 2010,” the BCC said.
The BCC predicts inflation will stay above the Bank of England’s
2.0% target, averaging 2.9% this year, 2.5% in 2013 and 2.2% in 2014.
It says the BOE will not sanction any further quantitative easing.
–London newsroom: 00 44 20 7862 7491; email: drobinson@marketnews.com
[TOPICS: MABDS$,M$B$$$]
