The estimate has fallen from June’s prediction of 1.3 percent and 1.9 percent at the start of the year.
And the BCC is pointing the finger of blame towards the Government for its bleak forecast for economic growth. The BCC said the Government are not doing enough to meet their aim of getting the economy back on track through business investment and exports.
Businesses need more help from the Government to grow, David Frost, the BCC’s General Director said. He also said that they need to cut back on the regulation that is laid onto businesses and that a simplification of the planning system was needed as the "The present system is broken”.
"The Government is right to reduce the deficit, but these measures must be matched by policies to stimulate growth," he said.
"If we don't get these policies right, we risk any recovery being weak and short-lived."
Their forecast for economic growth in 2012 has also been cut, to 2.1 percent from 2.2 percent.
The BCC are the latest in a long line of organisations who have announced that its growth forecast for the UK economy has been downgraded.
The Bank of England cut its estimate for 2011 to 1.4 percent from 1.75 percent last month. Governor Mervyn King said the outlook for the global economy had “deteriorated”.
The UK economy expanded by just 0.2 percent in April to June, which was down from 0.5 percent between January and March, according to the latest official figures from the Office of National Statistics (ONS).
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 514 )An argument about the pace of the implementation of new bank reforms, which are aimed at avoiding another taxpayers' bailout in a future financial crisis, has erupted between Conservative and Liberal Democrat ministers.
Business Secretary Vince Cable announced that the proposals, which will see banks forced to ring-fence their high street and riskier investment arms, should be immediately introduced.
Adopting the so-called “subsidiarised” model would mean in the event of a future crisis the authorities would be able to seize the retail arm of a troubled institution, protecting ordinary consumers’ accounts from losses run up by City bankers.
However, the time given to implement the measures has caused disruption amongst Westminster.
Prime Minister David Cameron and the Chancellor George Osborne are backing the banks’ demand to be given several years to slowly implement the reforms.
Angela Knight, Chief executive of British Bankers' Association, said: "We are in for a very difficult autumn. This is, therefore, the time to concentrate on economic recovery and paying back the Government and taxpayers. By all means think about new regulation but now is not the time to add that as an overlay with respect to costs, uncertainty or whether it is going to do anything beneficial anyway."
However, Nick Clegg is fully backing Mr Cable’s views that the measures should be immediately implemented.
In an interview in The Times, Mr Cable said: “It is disingenuous in the extreme to use the current context to argue against reform. Banks are in a way trying to create a panic around something which they know has got to happen.”
Andrew Cave, spokesman for the Federation of Small Businesses, agreed that reforms should be implemented sooner rather than later.
"We need reform of the banking structure now more than ever, and we have a window in time to achieve this... We absolutely need this to ensure that there are more routes to finance and that the competition drives down the cost of lending,” he said.
ww.glazers.co.uk/]www.glazers.co.uk[/url]
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( 3 / 750 )Official figures from the Office for National Statistics (ONS) have revealed that UK banks are responsible for 35 percent of the national economic decline since September 2008.
Compared to September 2008, when the British banking industry began its economic decline, the UK economy is 2.8 percent smaller and 4 percent smaller than the economic peak in March 2008.
The analysis by ONS has shown that the contraction in banking activity is accounted for one percentage point of the 2.8 percent fall.
Banks are only accountable for 5.1 percent of the national output; however, they are to blame for 35 percent of the national decline, making the impact the banks have on the economy completely out of proportion.
The banking industry has contracted by 2.6 per cent this year – this follows a 5.1 percent fall in 2010 and 7 per cent decline in 2009.
Chancellor George Osborne said: "While our economy as a whole has grown by 2.5 percent, the financial sector has shrunk by 4 percent. Take the financial sector out of the equation, and economic growth in the rest of the economy during the recovery has actually been above its average rate of the last two decades."
Philip Shaw, economist at Investec, said that in reality the damage was larger because of the effects on households and small business from restricted finance.
"For whatever reason, you've also got tighter lending conditions for households and small business now... the lack of credit is acting as a drag on the economy,” he said.
In comparison to the drag UK banks has brought onto the economy, retail has continued to provide support although the sector has been hit by a lack of consumer confidence. The industry, which accounts for 5.2 percent of total national output, grew 1.4 percent in 2010 and so far this year is up by 0.2 percent.
formation, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 2.9 / 941 )The Government has launched a new drive to help families who are blighted by poverty and crime with the launch of “social impact bonds”.
Government Ministers are encouraging private investors, philanthropists, charity group and other groups to donate money to the bonds, which will be used to help break the cycle of deprivation and would therefore not cost the taxpayer anymore money.
The taxpayer already foots a bill of £4bn a year for assisting 46,000 of the most deprived families in the UK.
Investors who support the bonds will get paid a return for any of the projects which are a success.
The scheme will be trialled in Hammersmith, Fullham and Westminster in London, and Birmingham and Leicestershire, with an aim to raise up to £40 million.
The scheme has been launched after Ministers became concerned that the current focus on treating the problems of individual cases creates a costly cycle of deprivation which can be impossible to break. Therefore, it is hoped that with the use of social impact bonds, several problems will be intensively tackled in a family setting.
Civil Society Minister Nick Hurd, said: "We must not be afraid to do things differently to end the pointless cycle of crime and deprivation which wrecks communities and drains state services.
"Social impact bonds could open serious resources to tackle social problems in new and innovative ways."
Mr Hurd went on: "We want to restore a stronger sense of responsibility across our society and to give people working on the front line the power and resource they need to do their jobs properly.
"Social impact bonds could be one of many Big Society innovations that will build the new partnerships between the state, communities, businesses and charities and focus resources where they are needed."
The trials are expected to be up and running next year.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 797 )A Government Minister has defended a deal with the Swiss authorities that will see UK tax evaders with hidden overseas accounts targeted. The deal will see the Treasury recoup more than £5bn in unpaid tax from Britons with Swiss banks accounts.
The deal was signed between the UK and Switzerland last night. The account holders’ identities will be kept secret but their money will be taxed for the first time, at up to 34 percent of the sum hidden.
Treasury Minister David Gauke has defended the move, calling the deal ‘historic’.
In 2013, the Swiss banks will hand over a one-off levy of more than £5bn to settle past tax liabilities of Britons with money hidden away in the country’s discreet banking system.
Switzerland will then impose a withholding tax of 48 per cent on income such as interest and 27 per cent on capital gains such as shares rising in value.
Dave Hartnett, the permanent secretary for tax at HMRC, signed the agreement in Zurich.
"The world has changed for tax evaders," he said. "A few years ago, nobody would have anticipated that we would conclude an agreement with Switzerland to tackle tax evasion."
Chancellor George Osborne said: "We will be as tough on the richest who evade tax as those who cheat on benefits. The days when it was easy to stash the profits of tax evasion in Switzerland are over."
There will be much criticism over the ongoing anonymity that the deal allows.
David Gauke told the BBC: "There was no prospect of the Swiss abandoning bank secrecy altogether.
"There is no political appetite for doing that and we also have to remember with Switzerland, with something like that, you would actually need to have a referendum on it, so there was no prospect of that happening.”
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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