British Chambers of Commerce Slashes UK Growth Rate

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The forecast for economic growth for 2012 has been slashed from 0.6% to 0.11% by the British Chambers of Commerce. However, the group did increase its forecast for 2012 with a change in figures from 1.8% to 1.9%.

The data was revealed in the latest Quarterly Economic Forecast, released by the British Chambers of Commerce, which coincided with official figures confirming the UK has returned to recession.

BCC director-general John Longworth called for more “enterprise-friendly” action from the Government.

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.

Mr Longworth called for the creation of a business bank to provide capital for small business, more infrastructure spending, long-term strategies for aviation and energy, and more deregulation.

Without action the economy will “bump along the bottom” for longer than expected, Mr Longworth said.

Mr Longworth said:

“We need growth and we need it now.”

“If the government works together with the private sector to create the right environment over the long term, we’ll be able to prove once and for all that bold businesses can propel us forward out of stagnation and firmly on the road to recovery.”

“While the rental bubble is unlikely to deflate as there is no readily acceptable alternative to the rented roof, it does appear to be approaching a limit in some areas. Agents report that the seemingly incessant demand is causing rental price pressure to spill over into other previously less sought-after areas and some tenants are attempting to negotiate lower rent.””This is a clear sign that rents may be hitting an affordability ceiling in some locations and when it hits an obstacle, like water, it finds the path of least resistance and makes its way to other nearby areas with more headroom.””It is an early warning sign of some over-heating and, as well as raising demand in cheaper locations, it will force some to find alternatives such as stay with parents or squeeze more people into smaller spaces.”

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