Knowledge Centre
7th December 2009
The British Chambers of Commerce has revised downwards the gross domestic product (GDP) growth it forecasts in 2009 and 2010, ahead of this week's Pre-Budget Report.
In its latest Economic Forecast, the group forecasts a 4.6% decline in GDP over 2009, and positive growth of 1.0% in 2010 - revised from the 4.3% decline and 1.1% growth figures it forecast in September. However, it is now more positive about prospects for 2011, increasing its prediction for GDP growth for the year from September's 1.9% to 2.3%.
The group also reduced its forecast for unemployment, which it now believes will reach a peak of 2.7 million by mid-2010, rather than 3.0 million.
Anticipating that public debt will "increase to dangerous levels" in the next couple of years, David Frost, director-general of the BCC, said that "reform of the public sector must be the cornerstone of a credible plan to reduce spending".
"Freezing public-sector pay and reforming pensions must be part of that plan, and action in these areas should start now," he added.
Meanwhile, Prime Minister Gordon Brown has detailed public-sector cuts worth £3 billion, as he outlined "efficiency savings" plans for the next Parliament.
The plans will include £1.3 billion in savings from "streamlining" Whitehall, which could see the wages among senior civil servants cut by up to 20%.
The FDA, a union representing senior civil servants, labelled the announcement "crude electioneering", and expressed concern over plans to move civil service jobs outside of London and the South East.
"People are often extremely reluctant to uproot their families… to move to other parts of the UK," said FDA general secretary Jonathan Baume.
"Any financial savings are very limited in the short term and significantly offset by the initial costs of the relocation and the disruption to effective delivery of services."
IMAGE: Fiona Hanson/PA Wire/Press Association Images
Business group reduces growth prediction ahead of Pre-Budget Report
In its latest Economic Forecast, the group forecasts a 4.6% decline in GDP over 2009, and positive growth of 1.0% in 2010 - revised from the 4.3% decline and 1.1% growth figures it forecast in September. However, it is now more positive about prospects for 2011, increasing its prediction for GDP growth for the year from September's 1.9% to 2.3%.
The group also reduced its forecast for unemployment, which it now believes will reach a peak of 2.7 million by mid-2010, rather than 3.0 million.
Anticipating that public debt will "increase to dangerous levels" in the next couple of years, David Frost, director-general of the BCC, said that "reform of the public sector must be the cornerstone of a credible plan to reduce spending".
"Freezing public-sector pay and reforming pensions must be part of that plan, and action in these areas should start now," he added.
Meanwhile, Prime Minister Gordon Brown has detailed public-sector cuts worth £3 billion, as he outlined "efficiency savings" plans for the next Parliament.
The plans will include £1.3 billion in savings from "streamlining" Whitehall, which could see the wages among senior civil servants cut by up to 20%.
The FDA, a union representing senior civil servants, labelled the announcement "crude electioneering", and expressed concern over plans to move civil service jobs outside of London and the South East.
"People are often extremely reluctant to uproot their families… to move to other parts of the UK," said FDA general secretary Jonathan Baume.
"Any financial savings are very limited in the short term and significantly offset by the initial costs of the relocation and the disruption to effective delivery of services."
IMAGE: Fiona Hanson/PA Wire/Press Association Images
Tags: Economy, Employment
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