British economic growth forecasts revised down
The business network organization expects a 3.0, 2.6, and 2.4 percent GDP growth separately for Britain from 2014 to 2016, slightly lower than its previous estimation of 3.2, 2.8 and 2.5 percent.
"The downgrades are mainly due to lower than expected growth in household consumption, exports and services," BCC said in a press release.
Though household consumption and services output are forecast to grow more slowly than predicted in the third quarter, they will be the main contributors to GDP growth in the next few years, said BCC. While business investment of the country is predicted with growth of 7.5 percent in 2014, 7.5 percent in 2015 and 7.4 percent in 2016.
BCC also forecasts that British quarterly GDP growth will remain at 0.7 percent in the fourth quarter of 2014, followed by a slowdown to 0.6 percent per quarter from the first quarter of 2015 onwards.
John Longworth, Director General of the BCC said in the statement that "downgrades to our growth forecast are a warning sign that we still face a number of hurdles before securing a balanced and sustainable recovery."
"A number of headwinds from the global economy are also having a real impact on British businesses," said Longworth. The uncertainty in the economy generally affects consumer confidence as does the consumer spending and debt cycle, he added.
BCC also warned that any short-term rate rises could present "a huge risk" to British economy, as well as to the vital business investment.
It estimates that British benchmark interest rate to rise to 0.75 percent in the third quarter of 2015, two quarters later than its previous estimation.
Then the interest rate will reach one percent in the fourth quarter next year and 1.75 percent in the fourth quarter of 2016, it said. ■