The British Chambers of Commerce (BCC), who predicts the UK’s economic growth, has reviewed their original forecast for 2012, reducing it by 1.3 percent. The forecast was initially published in November of this year, but the BCC reviewed the predictions after the crisis, which is currently affecting the eurozone, is clearly more serious than was first originally thought.
Speaking of the economy, John Longworth, Director General of the BCC, expressed: “The challenges facing the UK economy have grown in recent months. Uncertainty surrounding the eurozone will delay a significant upturn in growth until late in 2012. We expect inflation to fall sharply, which is positive news for businesses and consumers, but we will be faced with rising unemployment for some time to come.”
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“Despite our prediction of slow growth, there is no need for doom and gloom. The UK economy has the potential to recover and thrive. Our economic prospects will improve, but not overnight. A strong recovery relies on creating the right conditions for growth. Companies need the best possible environment to generate wealth and create jobs,” Mr Longworth added.
The BCC predicts that the first half of 2012 will see the slowest growth of between 0.1 and 0.2 per cent, but the figure should significantly increase when the London Olympics begins in July 2012.
Although the predictions look bleak for the first half of next year, David Kern, Chief Economist at the BCC wants the country to remain positive: “The immediate outlook is challenging and, though we believe a recession will be avoided, the risks cannot be shrugged off. Due to the combined impact of the eurozone crisis and the UK’s fiscal austerity plan, we expect growth to be minimal until mid-2012, and then improve gradually. Though UK growth will stay positive, and strengthen in the medium term, our forecast indicates that GDP will only return to its pre-recession level in 2014, while consumer spending will only rise back to its pre-recession position in 2015.”
So, although the figures look bleak for the start of 2012, people are hoping the Olympics will help kick start the UK’s economy. But after all, these are just predications and the BCC has already reviewed them once, so in theory, there is nothing stopping them reviewing the figures again in a few months time.