Economic growth forecasts February 2012: Is flat the new growth?

• The BBC reports that the Bank of England "predicts the economy will grow by 1.2%" in 2012.
  
• "We believe UK GDP will stagnate overall until mid-2012, with one quarter very likely in negative territory," says British Chambers of Commerce (BCC) Chief Economist David Kern. But BCC Director General John Longworth notes that "a new recession is not a foregone conclusion."
• CBI Director General John Cridland says: "2012 is going to be a hard road but if we are canny and act now to put in place solid economic foundations, we will be stronger and secure a better future for ourselves. We need to identify how the UK will earn its living in the years ahead and that means adjusting to change." The Telegraph reports that the CBI's "base scenario" projection is that the UK economy will rebalance itself, with GDP growth averaging 1.6% until 2015.
  
• "The annual rate of economic growth is forecast to remain below 2% until 2014, which in combination with a return to faster growth in productivity will moderate the pace of jobs recovery and prevent unemployment from falling below 2.5 million before the middle of the decade." This is according to the CIPD.
• The EEF expects 1% GDP growth in 2012. However, "the downside risks to growth are even more marked" than at the start of 2011.
• The Ernst & Young ITEM Club forecasts that UK GDP will run at 0.2% in 2012, rising to 1.8% in 2013 and 2.8% in 2014. It says that the UK economy is "likely to remain stalled until the second half of [2012,] when falling inflation should provide a platform for a consumer recovery," and that "a serious double dip" is not envisaged. However, it also cautions that even this "optimistic assumption" presupposes a speedy and successful resolution to pressing economic problems in the eurozone, China, and other territories.
• Goldman Sachs expects 0.7% GDP growth for the UK in 2012, compared with -0.8% for the eurozone. Goldman Sachs says: "Our economic forecasts assume some resolution to the eurozone debt crisis in the next few months. But the chances of a more chaotic outcome, in particular a break-up of the euro, although still small, have grown."
• "The UK likely re-entered recession at the end of 2011," says the IFS, which sees GDP growth averaging 0.3% in 2012.
• The IMF has slashed its forecast for UK GDP growth in 2012 from 1.6% to 0.6%. It predicts a "mild recession" for the eurozone ,with GDP expected to contract by 0.5% in 2012. IMF Economic Counsellor Olivier Blanchard says: "The outlook for growth is mediocre. [...] The world recovery, which was weak in the first place, is in danger of stalling. The epicentre of the danger is Europe, but the rest of the world is increasingly affected."
• One in three UK company directors sees a "high or very high" risk of recession, according to research from the Institute of Directors (IoD).
  
• NIESR predicts a double-dip recession, with GDP expected to contract by 0.1% in 2012.
• The Office for Budget Responsibility (OBR) predicts that the UK economy will grow by 0.9% over the course of 2011, with growth slowing to 0.7% in 2012. The BBC's Stephanie Flanders warns that even these predictions could prove "optimistic." She says: "If there is a recession in the eurozone, it is difficult to see how that forecast for 2012 would be achieved." Indeed, a majority of economists polled by the BBC believe that a double-dip recession is inevitable for Europe in 2012. The OBR publishes its updated forecasts for growth next month, on the same day that Chancellor George Osborne delivers his Budget 2012 speech (Wednesday 21 March 2012).
  
• The UK economy will contract by 1.3% in 2012, says Standard Chartered. It says: "The UK economy is likely to be in recession going into 2012 as the negative impact of fiscal tightening and falling real incomes is compounded by a downturn in demand from the UK' largest trading partner, the euro area. We expect GDP to contract in H1-2012, before bottoming out and eventually recovering in H2-2012."

ONS publishes its first revision of estimates for GDP growth in the fourth quarter of 2011 this Friday (24 February 2012).

• XpertHR economic commentary February 2012: Squeezed XpertHR's February 2012 economic commentary - published to XpertHR's Pay Intelligence blog - examines current threats to UK economic recovery, including the ongoing income squeeze.