UK economy will bounce back next year, says business group

A business group has predicted that the UK economy will recover significantly next year, although the risk of a relapse remains high.

The British Chambers of Commerce (BCC) has almost doubled its previous forecast for economic growth to 1.1% in 2010, up from 0.6% predicted in June, the BBC has reported.

The BCC said unemployment would peak at just over three million, fewer than the 3.2 million previously forecast. However, it said the economy will shrink by 4.3% this year; more than its June forecast of 3.8%.

BCC chief economist David Kern said: “The upturn in the economy has probably already started and we could see a relatively strong bounce-back in the next few quarters.

“But sustaining the recovery will be very challenging and the risks of relapse are high.”

Last month, accountants claimed the recession had ended after reported business confidence had significantly improved.

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