30th August 2013
The British Chambers of Commerce has joined the UK economic optimists as it upgrades its forecast for 2013 to 1.3 per cent writes Philip Scott.
The business network, which represents small businesses in the UK, has revised its original estimation from 0.9 per cent to 1.3 per cent for 2013, from 1.9 per cent to 2.2 per cent in 2014, and from 2.4 per cent to 2.5 per cent for 2015. However the BCC has warned a full recovery cannot be taken for granted.
It says the service sector will continue to drive the recovery, with full-year growth of 1.9 per cent in 2013, 2.6 per cent in 2014, and 3 per cent in 2015. It expects unemployment to have fallen to 2.45m, or 7.5 per cent of the workforce, by the end of this month, some 200,000 less than it predicted in May.
Just last week the Office for National Statistics revised its UK GDP estimate for the second quarter of 2013, saying the economy grew by 0.7 per cent over the three months to the end of June, a rise of 0.1 per cent from the estimate released in July.
John Longworth, director general of the BCC says: “The improved outlook is testament to the steadfast determination shown by businesses in previous quarters, who have consistently displayed confidence in the face of unwarranted pessimism over the economy.
“Unfortunately the recovery is not yet secure. We have had false dawns in recent years and although this upturn appears to be on stronger ground, we must be aware that complacency could lead to setbacks. There are many external factors, such as the eurozone, the Middle East, and the Chinese economy that could halt our progress. However our surveys have shown that firms are confident about their prospects and want to expand, but they cannot do it alone.”
The BCC’s upward revision follows that of think-thank, the National Institute for Economic and Social Research, which upped its own forecasts at the start of August.