The BCC has forecast UK unemployment to stand at more than 10% in 2009.

The British Chambers of Commerce (BCC) has published its March 2009 Economic Forecast, which predicts a large drop in GDP and a rise in unemployment to 3.2 million – just over 10% of the UK workforce – and calls again for the minimum wage to be frozen.

The forecast highlights the decline in UK manufacturing, which has so far this year experienced a 9% fall in output, and the downfall in capital investment. The financial position of the country is also focused on in the report, with a prediction that more than 10% of UK GDP will be borrowed by the government in 2010/11.

On a positive note, the report believes the current recession will be less severe than previous recessions – as a percentage of the workforce, the present unemployment rate is forecast to be lower than in the early 1990s – and that the manufacturing industry has the potential to recover.

David Frost, BCC’s Director General, said: “It will be business that leads the UK out of recession. For this reason it is vital that companies are given the freedom to create jobs and wealth.

“Ministers must do everything they can to help nurture industry while creating the conditions required to make growth a reality. This means accepting that the regulatory burden on business needs to be cut, scrapping the planned increase for National Insurance Contributions, and freezing the national minimum wage.”

Click here to read the BCC’s March 2009 Economic Forecast.