Forecasts improve from business group

Date: 7th September 2009

A business group has revised its economic forecasts upward, reflecting the improving conditions in the UK markets.

The British Chambers of Commerce (BCC) said that it now expects the economy to grow by 1.1 per cent in 2010.

Previously, the group had forecast growth of 0.6 per cent.

There was also a revision to the group's unemployment prediction, which comes at a time when the credit crunch and recession has pushed the jobless total to over 2.4 million.

The BCC said that the jobless total, traditionally a "lagging indicator" in economic downturns, would peak at three million next year.

It had previously seen a high of 3.2 million people.

BCC director general, David Frost, urged ministers to leave business taxation rates, such as those for corporation tax, as they were as the economy recovers.

"All the political parties must demonstrate that they recognise the vital role of wealth-creating businesses in driving a sustainable economic recovery," he said.

"The UK's recovery requires a thriving business sector, so it is vital that new business taxes, higher National Insurance contributions, and any measures that may damage enterprise and job creation are avoided."

Economic growth would be driven by improvements in the UK services sector, including stronger sales at smaller retailers, bars and restaurants.

The economy is predicted by the BCC to shrink by 4.3 per cent in 2009.