According to the UK Chamber of Commerce, UK economic growth will “ground to a halt” this year before briefly turning negative.
The group cut its 2022 growth forecast to 3.5% from 3.6% and said inflation will hit 10% in the most recent quarter — well above average wage increases.
Investment growth expectations for this year have also been lowered to 1.8% from 3.5%, the BCC report said.
The bleak outlook follows a warning from one of the world’s top economic authorities Britain’s growth next year will be worse than any other G20 country except Russia.
According to the OECD (Organization for Economic Cooperation and Development), there will be no GDP expansion at all in 2023.
The group said Britain was threatened by rising interest rates and taxes, as well as leading high inflation rising petrol prices and energy costs.
It is an assessment supported by the BCC.
Alex Veitch, the group’s policy director, said “the headwinds facing the UK economy show little sign of abating”.
“The war in Ukraine came just as Britain was embarking on a COVID recovery, further depressing corporate profitability,” he said.
“The projected decline in business investment is particularly worrying.
“It is vital that urgent action is taken on this and we are having constructive discussions with the government on its review of capital allowances and other measures to encourage business investment.”
“Stable and supportive” policies needed
Mr Veitch said growth could also be hit by falling consumer spending, caused by wage increases lagging behind rising costs.
“We forecast that if trends continue, inflation will not return to the Bank of England’s target rate until late 2024…” said the BCC’s policy chief, who called for “stable and supportive policies” to help businesses .
Shadow chief executive Jonathan Reynolds said the Tory failure had “hindered British business”.
“Labor would grow our economy with our plan to buy, make and sell more in the UK, our promise of climate investment and tax cuts for small businesses to get our economy into full swing now,” he said.
A Treasury spokesman said the UK had the fastest growth in the G7 last year and unemployment figures were at their lowest in almost 50 years.
“While we cannot completely isolate the UK from global pressures, we have a growth plan and are supporting people with the cost of living,” they said.
“Eight million of the most vulnerable families will receive direct payments of at least £1,200 this year, with all families receiving £400. We also invest in capital, people and ideas to increase growth and living standards for years to come. “
UK economic growth ‘to grind to a halt’ and 10% inflation on the horizon, says UK Chamber of Commerce | business news
Source link UK economic growth ‘to grind to a halt’ and 10% inflation on the horizon, says UK Chamber of Commerce | business news