The forecasts for GDP growth in both 2024 and 2025 were downgraded from 0.6 per cent and 1 per cent to 0.3 per cent and 0.7 per cent respectively.

Interest rates are set to peak at 5.5 per cent and ease only slightly in 2024 to 5.25 per cent before dropping to 4.5 per cent in 2025, still well above the average for the past 10 years.

Core inflation is proving sticky. But while BCC research shows inflation is the top concern for UK firms, fewer businesses now expect their prices to rise over the coming months.

The inflation rate is still expected to slow to 5 per cent in the fourth quarter (Q4) 2023, but take longer to return to the 2 per cent target, only reaching it in Q4 2025, BCC said in a release.

Imports, exports, and general government spending are all expected to decline this year.

The UK economy remains on course to avoid a technical recession, but growth is likely to remain so feeble that it will be hard to spot the difference, the chamber noted.

Evidence from recent BCC business surveys also showed business confidence levelling off after a brighter start to 2023.

Trade is also likely to continue to suffer, with both imports and exports forecast to be down significantly in 2023 (minus 4.7 per cent and minus 4.3 per cent respectively) due to weak global demand and the continuing impact of Brexit. Further regulatory changes at both the UK and EU borders are also likely to weigh on trade flows, it added.

Fibre2Fashion News Desk (DS)