The Confederation of British Industry and British Chambers of Commerce have each cut their 2012 UK GDP forecasts and called for the government to do more to prompt growth.
Both lobby groups now forecast negative growth for the UK this year. The CBI now predicts GDP will shrink by 0.3% in 2012, down from a May forecast of 0.6% growth, while the BCC has cut its own 2012 GDP forecast from 0.1% growth to a 0.4% contraction.
The CBI expects some improvement in GDP growth late in the year as a further drop in inflation and a bounce-back from the ‘Jubilee effect' help push quarterly growth to 0.6% in Q3 and 0.2% in Q4.
But the group has also revised down its 2013 GDP forecast from 2% to 1.2%, based on expectations of a weaker rate of global growth than previously assumed.
The BCC has cut its 2013 forecast to 1.2%, down from 1.9%, and director general John Longworth said the government should display "political backbone" in order to get the economy out of recession.
"UK businesses have got what it takes to help the UK return to growth, but they can only do this if the government acts quickly and radically to introduce both short-term stimulus measures and radical long-term policies for growth," the BCC said.
What made financial headlines over the weekend?
Pensions neglect to be criminal offence
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds