The British Chambers of Commerce has revised down its forecast for UK growth this year from 0.6 per cent to 0.1 per cent.
The BCC says the 0.3 per cent fall in GDP in the first quarter of 2012 coupled with continued troubles in the eurozone will keep GDP growth in the UK at minimal levels for the remainder of this year.
The BCC, which represents over 100,000 businesses, expects growth to gradually improve in 2013 and 2014. The firm has marginally raised its GDP output from 1.8 per cent to 1.9 per cent in 2013, with growth of 2.3 per cent in 2014.
The UK economy entered a technical recession last month after the Office for National Statistics reported two consecutive quarters of declining growth.
BCC director general John Longworth says: “Our new forecast underlines the need for bold action to deliver growth. Businesses are busting a gut in an uncertain environment, and they will need to continue to do so. But if companies are to accept uncertainty as the new norm, then they must be met with a bold, enterprise-friendly government to enable them to grow in the long term. Without government working together with business, the economy will continue to bump along the bottom for longer than we’d all like.”