The 2012/12/05 at 07:04
Stéphanie Salti, in London
Judging from the economic forecasts published by the BCC on 4 December, Great Britain is still in deep water. On the eve of the traditional publication of the Autumn Statement when the Finance Ministry details Britain’s economic and budgetary situation, the BCC anticipates an extension of the subdued economic climate. These forecasts echo statements made by the Chancellor of the Exchequer George Osborne who admitted, over the first weekend in December, that the reduction of public debt would take longer than expected.
Sharing this opinion, the BCC – basing itself on forecasts made by the independent budgetary surveillance body, the OBR (Office for Budget Responsibility) – estimates that Great Britain’s debt will amount to 104.1 billion pounds in 2012-2013, in other words 12.1 billion pounds more than that anticipated by the OBR and a further 20 billion pounds for the years 2013-2014 and 2014-2015, when debt will come in at respectively 118 and 95 billion pounds. The BCC nevertheless insists on the importance of continuing to follow the austerity policy embarked upon two and a half years ago – in its opinion the only way to cut both colossal debt and a huge public deficit.
The consequences of this policy, on top of the deterioration of international economic conditions, will however weigh down heavily on the country’s growth figures. While the BCC has reviewed its GDP growth estimates upwards this year, to -0.1%, following a more resistant third quarter than expected, degradation is expected in 2012 and 2013: GDP growth of 1 % is estimated for 2013, and 1.8 % for 2014. The continuing slowdown of GDP growth will therefore delay the rebalancing of the British economy expected thanks to export trade surplus, according to the BCC. Hopes for the country’s swift reindustrialisation are also being postponed: while manufacturing production remains an important sector in Britain, its contribution to the GDP has declined considerably in recent decades, making up only 10.5 % of the economy today.
Similarly, employment figures that swelled in the third quarter of 2012, are set to worsen in coming months: from 7.8 % today, the unemployment rate is expected to rise to 8.1 % at the end of 2013, in other words 2.650 million persons out of work, before settling on the path of improvement in 2014 and 2015, according to the BCC. Youth unemployment should remain high: 805,000 young people aged between 18 and 24 are expected to be jobless at the end of 2013, in other words 19.4 % of this age group. Those in the 16-17-year-old bracket are likely to suffer even more: 185,000 young people in this group are expected to be out of work in one year’s time – in other words over one-third of this category.