Published On: Fri, Mar 11th, 2016

UK economic growth forecast cut by BCC

Construction of Crossrail

The British Chambers of Commerce (BCC) has downgraded its growth forecast for the UK economy, blaming “global headwinds and uncertainty”.

It now expects the UK’s economy to grow by 2.2% this year, down from a previous estimate of 2.5%.

The BCC also cut its growth forecast for 2017 to 2.3% from 2.5%, and expects growth of 2.4% in 2018.

It said the downgrade was due to weaker growth in most areas of the economy, reflecting the global slowdown.

The business body said it expected services and consumer spending to continue driving the UK economy.

Budget plea

BCC acting director general, Dr Adam Marshall, told the BBC a “significant number of global factors” were to blame for the growth downgrades.

“Obviously we’ve seen the turmoil on the financial markets in recent weeks, we’ve seen commodity prices and the price of oil, in particular, up and down.

“You’ve got economies elsewhere like the eurozone with huge stimulus measures unveiled yesterday where there are questions about the future performance of those economies and, of course, you’ve got the kind of political uncertainty in place like the Middle East,” he added.

He called on the chancellor to use his Budget next week to bring forward road, rail and digital infrastructure projects, and to resist burdening companies with more costs and taxes.

The organisation represents over 100,000 businesses in the UK.

The BCC expects annual average growth in household consumption to slow from 3% in 2015 to 2.7% this year, dropping to 2.5% in 2017 and to 2.4% in 2018.

It expects the service sector to remain the biggest contributor to GDP growth with an increase of 2.6% forecast in 2016, 2.7% in 2017 and 2.7% in 2018.

Manufacturing output is expected to grow more slowly than services, increasing by 0.5% this year, 1.4% in 2017 and 1.4% in 2018.

Image copyright Getty Images
Image caption Former BCC director general John Longworth resigned on Sunday

During an interview on the Today programme, Dr Marshall refused to discuss the resignation of the former director general, John Longworth.

Mr Longworth left the organisation at the weekend after saying at the BCC’s annual conference that he believed the UK had a “brighter” economic future outside the EU.

Dr Marshall denied the row had dented the BCC’s credibility.

“We have a long standing position of neutrality on the EU referendum debate,” he said.

“Of course, that was demanded of us by our owners the local Chambers of Commerce up and down the country and that’s because there are very real division in local business communities.”

 

[Source:- BBC]