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BCC cuts growth forecast for the UK economy | |
(about 1 hour later) | |
The British Chambers of Commerce has cut its growth forecast for the UK economy, blaming rising inflation and a squeeze on household incomes. | The British Chambers of Commerce has cut its growth forecast for the UK economy, blaming rising inflation and a squeeze on household incomes. |
It now expects expansion of 1.3% this year, compared with its previous estimate of 1.4%, with growth of 2.2% predicted in 2012, down from 2.3%. | It now expects expansion of 1.3% this year, compared with its previous estimate of 1.4%, with growth of 2.2% predicted in 2012, down from 2.3%. |
The official forecast from the Office of Budget Responsibility is for growth of 1.7% this year. | The official forecast from the Office of Budget Responsibility is for growth of 1.7% this year. |
Inflation currently stands at 4.5%, more than double the 2% target. | Inflation currently stands at 4.5%, more than double the 2% target. |
Falling unemployment | Falling unemployment |
Despite cutting its economic growth forecast, the BCC said the government was right to continue with its efforts to trim the UK's budget deficit by cutting public spending. | Despite cutting its economic growth forecast, the BCC said the government was right to continue with its efforts to trim the UK's budget deficit by cutting public spending. |
BCC director-general David Frost said he expected economic growth to gather momentum at the end of this year, strengthening to 2013, led by higher exports and business investment. | BCC director-general David Frost said he expected economic growth to gather momentum at the end of this year, strengthening to 2013, led by higher exports and business investment. |
Regarding unemployment, the BCC expects it to fall very slightly, from 2.65 million to 2.6 million by mid-2012. | Regarding unemployment, the BCC expects it to fall very slightly, from 2.65 million to 2.6 million by mid-2012. |
The most recent official figures from the Office for National Statistics showed that the UK economy grew 0.5% in the first quarter of 2011. | The most recent official figures from the Office for National Statistics showed that the UK economy grew 0.5% in the first quarter of 2011. |
A Treasury spokesman stressed that the economy was continuing to create jobs, with UK unemployment falling in the three months to March, the second quarterly drop in a row. | A Treasury spokesman stressed that the economy was continuing to create jobs, with UK unemployment falling in the three months to March, the second quarterly drop in a row. |
He added: "The government welcomes the BCC's continued support for the deficit reduction plan." | He added: "The government welcomes the BCC's continued support for the deficit reduction plan." |
However, shadow Treasury minister Chris Leslie said the BCC's figures showed that the government was cutting spending too quickly. | However, shadow Treasury minister Chris Leslie said the BCC's figures showed that the government was cutting spending too quickly. |
He said: "The British Chambers of Commerce are just the latest major organisation to downgrade their forecasts for economic growth in the UK, and continue to predict a rise in unemployment as deep cuts and tax rises start to kick in. | He said: "The British Chambers of Commerce are just the latest major organisation to downgrade their forecasts for economic growth in the UK, and continue to predict a rise in unemployment as deep cuts and tax rises start to kick in. |
"Slow growth and more people out of work and on benefits will make it harder to get the deficit down." | "Slow growth and more people out of work and on benefits will make it harder to get the deficit down." |