The British Chamber of Commerce (BCC) has revised down its UK GDP growth expectations but stopped short of predicting a double-dip recession.
The lobby group has this morning revised down GDP forecasts from 0.8% to 0.6% while leaving 2013 expectations unchanged at 1.8%.
The BCC believes it is important for the government to remain committed to austerity measures but not to overlook the importance of providing stimulus to the private sector.
John Longworth, director general of the BCC, says: “Our economic forecast underlines the need for the government to deliver a budget that will bring confidence to businesses.
“The Chancellor must pull out the stops to enable British businesses to drive growth here at home.”
He adds: “Real de-regulation, a simply easy-to-use planning system, improving the flow of credit to firms, and improving our lacklustre infrastructure and skills system – these are the measures businesses want to see from a government confident enough to take radical measures to squeeze every last drop of growth out of the UK economy.”
The issue of improving the flow of credit to businesses, particularly smaller companies, came under scrutiny in February when it was revealed that Project Merlin had again failed to reach lending targets to small and medium enteprises (SMEs).
The BCC believes the main drivers of UK GDP growth over the next two years will be net exports and business investment but warns that deleveraging will continue to suppress demand.
In order to help overcome such obstacles, the BCC has suggested the Treasury scrap the swinging 5.6% business rates rise expected in April as well as providing further support for SMEs.