The 2012/09/06 at 08:21
Stéphanie Salti, in London
The British Chamber of Commerce (BCC) has long demonstrated staunch support for the belt-tightening policy launched by the Conservative government under David Cameron since May 2010. While this support is still in place, the publication of the country’s economic forecast by the BCC, at the end of August, raised a few doubts regarding the relevance of how operations are currently being managed by the country. The forecast statement specifies that the “BCC calls for action to create a new model economy for the UK, with immediate measures to support business confidence and investment, a radical long-term growth plan, and a continued commitment to deficit reduction”. According to the BCC, businesses need to have easier access to finance while private funding should be unlocked to be invested in British infrastructures. This appeal for new fiscal stimulus follows the downward revisions of most economic indicators analysed by the organism: while the BCC, on the basis of data from the Office for National Statistics (ONS), forecasted 0.1 % growth in the United Kingdom in June this year, it now envisages negative growth of 0.4 % for the whole of 2012, whereas growth in 2013 has been scaled down from 1.9 to 1.2 %. The positive effects of the Olympic Games anticipated at one stage ultimately look like having no significant impact on the country’s growth. The BCC is also now betting on an extension of the government’s austerity plan by two to three years in order to reduce structural deficit. All the more so as demand remains uneven in different sectors: while demand in British households remained weak in the first quarter, business investment on the other hand is expected to return to growth, by 4.5 %, in 2012, then 5 % in 2013. No signs of the previously expected improvement in exports either this year, even if 2013 bodes for slight improvement. Employment figures, however, should be better than formerly thought: according to the BCC, Britain should have 2.75 million unemployed persons at the end of 2013, in other words 150,000 fewer than anticipated by the body in June. The publication of these statistics coincides with that of the Confederation of British Industry (CBI), which continues to support the policy of the Cameron government. Like the BCC, the employers’ organisation has nevertheless scaled down its estimates and foresees negative growth of 0.3 % this year, and growth of 1.2 % in 2013, conforming to the forecasts of most economists. While the frustration of businesses has not ceased to grow in recent months, the Chancellor of the Exchequer, George Osborne, has persisted in rejecting different calls for more loans to stimulate demand. The relationship between businesses and the government, harmonious until now, may well deteriorate shortly.