In view of the UK economy, the British Chamber of Commerce has slightly altered its predictions for 2011 and 2012. The government’s austerity programs will hit hardest in the beginning of the New Year, with things coming around slightly at mid-year and in the third quarter when the BCC predicts that Bank of England will lighten hold on interest rates.
The predictions were changed from an expected GDP growth in 2011 of 2.2 per cent to an altered prediction of 1.9 per cent and from an expected growth of 1.8 per cent up to 2.1 per cent for 2012.
They say that GDP was strong during quarters two and three of 2010 and they would expect that pattern to persist were it not for the planned austerity measures, which are at the heart of their re-adjustment.
The BCC says that it agrees with the measures the government is about to undertake in order to address the deep deficit, but it also recognizes that these measures will have a hard impact on the British people and take some sorts of adjustment. That explains why the predictions have gone down for 2011, but up for 2012.