The economic downturn in Britain will be deeper than previously thought this year and the recovery will be muted, the British Chambers of Commerce (BCC) said today.
According to the lobby group's latest forecasts, the economy will contract by 2.8 per cent this year, markedly worse than its January prediction for a decline of 2.2 per cent, and driven by sharp falls in consumer spending, investment and inventories.
Britain's economy shrank by 1.5 per cent in the three months to December 2008, its fastest rate since the 1980s.
The BCC said it expected the cumulative decline in GDP in the current recession to come in at 3.7 per cent, much more severe than the 2.5 per cent recorded in the recession of 1992-1993.
And it revised down its growth forecast for 2010 to 0.8 per cent from 1.1 per cent in January.
It also said it expects unemployment to hit 3.2 million in the second half of 2010, or just over 10 per cent of the workforce, higher than its January forecast of 3.1 million.
Reuters