Unemployment up, lower growth, but better prospects by BCC on 08-Mar-2011

I n it’s latest Quarterly Economic Forecast published today, The British Chambers of Commerce (BCC) predicts lower growth and increased unemployment into 2011, but makes some positive comments on the UK economy stating that "the current attempts to rebalance the economy towards the private sector will improve the UK economy’s longer-term prospects. Britain’s future success will depend on the relentless pursuit of policies aimed at strengthening the private sector and improving the economy's productive potential."

"British businesses will welcome the Government’s desire to boost enterprise, and reduce red tape," commented David Frost, Director General of BCC. "But these words must be backed by action. While we support efforts to reduce the UK’s deficit, these measures alone will not deliver a sustainable recovery. The Budget must commit to explicit policies that will help firms thrive. This is the time for the Government to deliver on its promises and ensure businesses can invest, export and create jobs. The Government is right to persevere with implementing its tough deficit-cutting plan and we expect the private sector to absorb these measures, given the right supportive policies in the Budget. This would allow growth to strengthen towards the end of this year and into 2012."

"While a new recession can be avoided, economic policy must focus on limiting the risks of a new major setback," said David Kern, Chief Economist at BCC. "Despite concerns around inflation, it is important for the UK to maintain an expansionary monetary policy with very low official interest rates until later in the year."

"But there is room for cautious optimism. If the deficit-cutting plan is implemented successfully, there are realistic prospects that trend growth of UK GDP will increase to 2.5-2.7% per annum after 2015."

British Chambers of Commerce (BCC):
www.britishchambers.org.uk

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