By Marcus Leach
There was further bad news for Chancellor George Osborne today (Friday) as the British Chambers of Commerce (BCC) predicted that the UK economy would shrink by 0.4% in 2012.
Not only that, but the BCC cut their forecast for 2013 from 1.9% to 1.2% growth the day after the Confederation of British Industry cut their forecast for GDP growth in 2012.
The BCC have said the eurozone crisis and a sharp rise in food and oil prices posed a continuing threat.
The Director General of the British Chambers of Commerce, John Longworth, called on politicians to do more to help the economy grow.
"There are only a 150 MPs out of 650 that have ever been in business and only 30 have got any qualifications in science," he told the BBC
"We've now got a political class that's divorced from the reality of business and economics."
However, the BCC did back growth measures such as creating a business bank and Bank of England support for small business borrowing.
But it said that the Chancellor George Osborne should press ahead with cuts in benefits, the state pension and the civil service, which it said were needed to retain the confidence of financial markets.
"As long as the chancellor demonstrates that he is committed to a firm fiscal plan, a moderate fiscal stimulus would be consistent with maintaining strong market credibility," the BCC chief economist, David Kern, said in his latest quarterly forecasts for the UK economy.
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