The BCC said it now expects the economy to expand just 1.1% in 2011, compared with its 1.3% estimate in June. It’s outlook has nearly halved since the start of the year when it predicted growth of 1.9%.
The BCC said the government’s aim to rebalance the economy towards exports and business investment was not happening fast enough, and called upon the Bank of England to consider a further round of quantitative easing.
BCC director general David Frost said the government had to do more to help companies grow while at the same time continuing measures to curtail the UK’s budget deficit.
“The government is right to reduce the deficit, but these measures must be matched by policies to stimulate growth,” he said.
“If we don’t get these policies right, we risk any recovery being weak and short-lived.”
The BCC has also cut its forecast for economic growth in 2012 to 2.1% from 2.2%.
The cut comes after the Bank of England itself downgraded its own growth forecasts from 1.75% to 1.4% for 2011.
The government’s Office of Budget Responsibility currently forecasts that the UK economy will expand by 1.7% in 2011, but actual growth has fallen back rapidly in the first six months of the year.
While there was growth of 0.5% in the first quarter of 2011 according to official figures from the Office of National Statistics, this fell to just 0.2% in Q2.
