The British Chambers of Commerce (BCC) has estimated that the UK economy will shrink by 0.1% this year, less than the 0.4% contraction it had predicted previously.
This improvement was said to be due to, “stronger-than-expected” growth in the last quarter, helped by the Olympic Games.
The BCC also estimate that the UK economy will see a growth of 1% for the whole of 2013, down from the 1.2% it had forecast in September.
Director-general of the BCC, John Longworth said, “As we wait in anticipation for the chancellor to deliver his Autumn Statement tomorrow, our new forecast highlights the challenges still facing the UK economy over the months and years ahead.”
“The fact remains that growth is still too weak. Thankfully, we have businesses here in the UK that are ambitious, determined and resilient.”
The BCC have predicted that public sector borrowing would be £104.1 billion for 2012/13, which has increased by more than £12 billion since the last prediction in March.
John Longworth commented, “Many firms are expanding exports, investing, and creating jobs, but more must be done to support the aspirations of growing companies that will be the wealth creators of tomorrow.”
Despite the positive economic growth in September the UK has still not recovered the levels of output seen before the financial crisis in 2008. During 2014 the BCC estimate the UK economy to grow by a further 1.8%. The BBC commented that the reduction in the level of growth was due to the fact the, “international environment has worsened, as growth forecasts for world trade, for the eurozone, and for other major economies have been revised down in recent months.”