BCC cuts UK GDP forecasts and calls for fiscal stimulus

The British Chambers of Commerce has cut its forecast for UK GDP growth for 2012 and has called for the government to announce a modest fiscal stimulus should public sector borrowing come in under target for 2011/12.

The BCC predicts the UK will escape a double-dip recession but has lowered its prediction for 2012 growth from 0.8% to 0.6%, and said Chancellor George Osborne must be as concerned about growth as he is about deficit reduction. "With public sector borrowing likely to undershoot the OBR forecast by approximately £8bn, a fiscal stimulus totalling some £4bn would be consistent with maintaining strong UK market credibility and would not endanger our AAA-credit rating. The critical priority is to sustain growth while cutting the deficit," said David Kern, chief economist at the BCC (pictured)...