- Business group downgrades 2012 growth forecast from +0.1% to -0.4%
- Growth forecast for 2013 is revised down from 1.9% to 1.2%
- Headwinds from slowing global economy, crisis in the eurozone, and domestic austerity measures complicating UK recovery prospects
- Continued reports of growth by many Chamber members suggests there is a reserve of business confidence and strong performance in the UK that can be harnessed
- BCC calls for action to create a new model economy for the UK, with immediate measures to support business confidence and investment, a radical long-term growth plan, and a continued commitment to deficit reduction
The British Chambers of Commerce (BCC) today (Friday) published its Q3 economic forecast. The business group has downgraded its predictions for UK growth in 2012 from +0.1% to -0.4%, and its predictions for 2013 from 1.9% to 1.2%. While many Norfolk Chamber members have continued to report positive trading conditions and growth intentions in recent months, the deteriorating global environment has meant that the UK economy as a whole is now likely to shrink in 2012. The Norfolk Chamber and BCC both believe that UK businesses have got what it takes to help the UK return to growth, but they can only do this if the government acts quickly and radically to introduce both short-term stimulus measures and radical long-term policies for growth.
Commenting, Caroline Williams, CEO of Norfolk Chamber said: “A new model economy for Britain cannot be summed up as ‘Plan A’ or ‘Plan B’. Instead, it is about actively supporting the aspirations of the thousands of growing businesses across Norfolk and the UK, as well as our future economic prospects as a nation.
“Since the election of the Coalition Government, the Norfolk Chamber and BCC have supported deficit reduction, and a relentless focus on creating the conditions for businesses to thrive. Two years on though, the UK economy is stagnating, with headwinds from a slowing global economy, difficulties in the eurozone, pressure from domestic austerity measures, low business investment and volatile commodity prices all bearing down on our growth prospects.
“While many businesses out there are growing exports, seeking investment, and creating jobs, more needs to be done so the economy can move from a vicious cycle of stagnation to a virtuous cycle of higher growth and reduced borrowing. Companies now accept they are operating in a tougher and more uncertain environment, but they need an enterprise-friendly government with bold policies if they are to drive recovery.
“That’s why we are adding new calls for immediate and decisive action to our existing recommendations for long-term growth.
“Business wants a hybrid strategy that delivers both deficit-reduction and growth. This means a continued commitment to public spending cuts, support for the economy without a new and damaging consumer credit bubble, as well as a strong push to improve business access to finance and unlock massive private funding to renew Britain’s infrastructure. Success will require both the government and the Bank of England to use their balance sheets – both to invest and for securitisation – at a time when Britain has both market credibility and rock-bottom borrowing costs.
“Politicians need to show leadership. We need an economic action programme so that Britain can excel, and make its way in the world. We are a great country, as we demonstrated during the Olympics. We have the talent and the energy, but we need the political will to focus relentlessly on economic growth. It’s not that nothing else matters, it’s that without it, nothing else is possible.”
