The UK’s economic growth is stalling as the cost of living crisis deepens, a leading business lobby has warned.

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(Bloomberg) – Britain’s economic growth is stalling as the cost of living escalates, a leading business lobby has warned.

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Britain’s Chambers of Commerce have predicted output will be barely higher in the fourth quarter than it was at the end of 2021, with consumers and businesses having to rein in spending as taxes climb and the economy inflation reaches 10%.

In a report released late Wednesday, the BCC said it saw the economy stagnating in the second and third quarters and contracting slightly in the last three months of the year. For 2023 as a whole, GDP will only grow by 0.6%, he said.

The gloomy outlook will add to fears that the UK risks sliding into recession as soaring prices eat away at household living standards and drive up the costs businesses have to absorb.

Inflation hit a 40-year high of 9% in April and the rate is expected to peak in October, when another sharp rise in energy bills is expected.

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“Our latest forecast indicates that the headwinds facing the UK economy show little sign of abating, with continued inflationary pressures and sluggish growth,” said Alex Veitch, policy director at the BCC, which represents dozens thousands of companies that together employ 6 million people. people.

The forecasts are more optimistic than the average. Overall, economists polled by Bloomberg last month expected growth to pick up in the second half after a sluggish second quarter.

The BCC said consumer spending and business investment are expected to grow less this year than expected, and barely increase in 2023. Veitch said the downward revision to business spending was “particularly concerning” and urged the government to take urgent measures to encourage investment. .