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Economy growth forecast for 2011 revised

According to a revised forecast from the British Chambers of Commerce, the UK economy will grow by less than expected in 2011 but growth in 2012 will be better than predicted.

The group downgraded its forecast for UK GDP growth in 2011 to 1.4% from a December forecast of 1.9% stating that the downward revision was due to an unexpected fall in 2010's fourth quarter GDP.

Meanwhile, retail sales fell 0.4% in February against a year ago, according to the British Retail Consortium. February's fall was the weakest sales performance since last April when like-for-like sales fell by 2.3% due to the difference in timing of the Easter holiday.

In its forecast, the BCC increased its estimate for unemployment for early 2012 to 2.65 million, up from the original 2.6 million previously forecast. However, the business group raised its prediction for growth in 2012 to 2.3% from 2.1%.

Last weekend, David Cameron gave a speech at the Conservative Party spring conference highlighting the importance of the private sector to the UK's economy. He pledged to stand behind entrepreneurs and stand against the "enemies of enterprise".

BCC director general David Frost said: "British businesses will welcome the government's desire to boost enterprise and reduce red tape but these words must be backed by action. While we support efforts to reduce the UK's deficit, these measures alone will not deliver a sustainable recovery."

The  British Retail Consortium Director General Stephen Robertson said that the consortium's latest retail figures represented a sharp change in consumers' spending habits.

"February's figures are a return to a more realistic picture of how things are for customers and retailers. Customers are cautious and are cutting back in a big way on non-essential spending," he said.

Last month's fall followed a strong January, when retail sales rose 2.3%. According to the British Retail Consortium figures, sales of clothing, furniture and home accessories fell in February, on a like-for-like basis, compared to a year ago. Areas that saw growth were Food & Drink and footwear .

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