18th August 2008
UK unemployment 'could hit 2 million'
Another 300,000 UK workers could lose their jobs over the next two to three years, the British Chambers of Commerce (BCC) has warned.
In their quarterly economic forecast, the BCC highlighted key concerns for the state of the UK economy.
The organisation said that British businesses face a tough two years, and that there is now a "distinct possibility" of technical recession. It also stressed that businesses must 'forcefully resist' the possibility of business tax increases.
BCC director general David Frost said "the correct policy decisions are still needed to ward off the threats of a serious and prolonged recession".
"The longer the MPC waits before cutting rates, the bigger the danger that the economic situation would deteriorate," he added.
BCC economic forecaster David Kern said that UK GDP growth is likely to be negative or zero over the next two or three quarters.
"Thereafter, we expect a shallow recovery, but the period of weak, below-trend, growth is likely to be prolonged, lasting until the final months of 2009 or early in 2010," he said.
The forecast comes as the London Retail Sales Monitor revealed that retail sales growth in the capital has weakened since this time last year. Retail sales in London in July were 6.2% higher than the previous year, weaker than the 12.9% in July 2007.
"Factors affecting other parts of the UK, such as falling house prices and the squeeze on incomes, are starting to impact on the capital," said the British Retail Consortium's director-general, Stephen Robertson.
In their quarterly economic forecast, the BCC highlighted key concerns for the state of the UK economy.
The organisation said that British businesses face a tough two years, and that there is now a "distinct possibility" of technical recession. It also stressed that businesses must 'forcefully resist' the possibility of business tax increases.
BCC director general David Frost said "the correct policy decisions are still needed to ward off the threats of a serious and prolonged recession".
"The longer the MPC waits before cutting rates, the bigger the danger that the economic situation would deteriorate," he added.
BCC economic forecaster David Kern said that UK GDP growth is likely to be negative or zero over the next two or three quarters.
"Thereafter, we expect a shallow recovery, but the period of weak, below-trend, growth is likely to be prolonged, lasting until the final months of 2009 or early in 2010," he said.
The forecast comes as the London Retail Sales Monitor revealed that retail sales growth in the capital has weakened since this time last year. Retail sales in London in July were 6.2% higher than the previous year, weaker than the 12.9% in July 2007.
"Factors affecting other parts of the UK, such as falling house prices and the squeeze on incomes, are starting to impact on the capital," said the British Retail Consortium's director-general, Stephen Robertson.
Tags: Employment, Retail & Shop
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