Economic recovery 'to be better than expected'

Britain’s economy will grow more strongly in 2010 than previously predicted, a leading business group has said.

The British Chambers of Commerce (BCC) forecast an expansion of 1.1 per cent for the year, up from the previous prediction of 0.6 per cent.

Maximum unemployment levels were also trimmed, with the jobless total thought likely to top out at just over three million instead of 3.2 million.

The BCC’s changes reflect improvements in general economic conditions over recent months, with some analysts suggesting that the UK could be out of recession already.

However, the business group still expects GDP to contract by 4.3 per cent in 2009, a figure roughly in line with other predictions from the International Monetary Fund and Organisation for Economic Co-operation and Development.

BCC director general David Frost also warned ministers that improving conditions should not lead to increases in taxation.

’All the political parties must demonstrate that they recognise the vital role of wealth-creating businesses in driving a sustainable economic recovery,’ he said.

’The UK’s recovery requires a thriving business sector, so it is vital that new business taxes, higher National Insurance contributions, and any measures that may damage enterprise and job creation are avoided.’ADNFCR-2318-ID-19348840-ADNFCR