The British Chambers of Commerce has revised its economic forecast to reach 1.7 per cent growth in 2010, not withstanding the unemployment which will take place later this year with the government cut backs on spending. The forecast has been changed due to the better-than-expected growth which occurred this spring. It was the fastest in almost ten years.
The expansion through this year will most certainly be met with paramount job losses as the government events enacts more of its austerity programs.
David Kern, BCC Chief Economist, offered his opinion about a successful plan, saying: “If successful, the forceful deficit-cutting strategy announced in the emergency budget would put the UK on a path of sustainable and affordable recovery, and could help create a leaner and fitter economy. But, the scale of fiscal retrenchment, and the decision to cut the deficit at an accelerated pace, will inevitably increase dangers of a double-dip recession.”
On a still discouraging note, the BCC estimated the growth over the next four to five years averaging a little under 2 per cent per year. That’s compared to the average 3 per cent experienced between 1993 and 2007.
The labor market will also suffer over the next 18 months as unemployment will probably climb to 8.3 per cent of the workforce, or about 2.6 million people.
Considering what’s at stake for the UK economy, the BCC also wants the Bank of England to maintain the Base Rate record low of 0.5 per cent until at least the second quarter of 2011.
The BCC is also asking the government to construct a growth plan to partner its deficit reduction measures.