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The British Chambers of Commerce (BCC) has increased its forecast for UK growth for 2012, but still expects the economy to shrink.

The UK will shrink by 0.1% this year, less than the 0.4% contraction it had predicted previously, the BCC said.

That is "entirely due to the stronger-than-expected" growth in the last quarter, helped by the Olympic Games.

But it now sees growth of 1% for the whole of 2013, down from the 1.2% it had forecast in September.

"As we wait in anticipation for the chancellor to deliver his Autumn Statement tomorrow, our new forecast highlights the challenges still facing the UK economy over the months and years ahead," said John Longworth, director-general of the BCC.

"The fact remains that growth is still too weak. Thankfully, we have businesses here in the UK that are ambitious, determined and resilient."

Chancellor George Osborne gives the Autumn Statement on Wednesday. Over the weekend, he admitted that curbing the UK's financial deficit was "taking longer" than planned.

The BCC said that public sector borrowing would be £104.1bn for 2012/13 - more than £12bn higher that it had predicted in March.

"Many firms are expanding exports, investing, and creating jobs, but more must be done to support the aspirations of growing companies that will be the wealth creators of tomorrow," Mr Longworth said.

Last month, it emerged that the UK economy had bounced back from recession in the three months to September.

The economy grew by 1.0%, after contracting for the previous nine months. The UK has still not recovered the levels of output seen before the financial crisis in 2008.

For 2014, the BCC cut the forecast to 1.8%, from 2.2%.

The BCC said that the lower GDP growth forecasts for 2013 and 2014 were due to the fact that the "international environment has worsened, as growth forecasts for world trade, for the eurozone, and for other major economies have been revised down in recent months" and that more spending cuts were likely in the UK.