Treasury ready to underwrite up to £40bn loans for business

The Government was yesterday urged to take “bold measures” to stimulate the economy after a business lobby group warned of “minimal” growth until the second half of next year.

By The Newsroom

Published 28th Nov 2011, 09:13 BST

The British Chambers of Commerce (BCC) slashed its forecast for 2012 GDP growth to 0.8 per cent from 2.1 per cent and said the recovery will be “very weak” for the next two or three quarters amid the austerity measures and eurozone debt crisis.

It also cut its forecast for 2011 for the fourth time this year and now expects a GDP increase of just 0.9 per cent, down from 1.1 per cent two months ago and 1.9 per cent at the start of the year.

The BCC urged Mr Osborne to “take bold measures” to improve infrastructure, help businesses to invest and support exporters in his Autumn Statement.

It predicted that the Bank of England will pump another £50 billion into the economy through its quantitative easing scheme. But it called on the Bank to start buying assets directly from businesses, alongside its purchases of Government bonds, to support credit-easing plans set to be announced by the Chancellor.

The Government Bank of England