A forecast that the UK economy is likely to shrink overall in 2012 was today described as "disappointing and alarming" by a Kent business chief.

In figures published today, the British Chambers of Commerce (BCC) downgraded its prediction for UK growth in 2012 from +0.1% to -0.4%.

Jo James, chief executive of Kent Invicta Chamber of Commerce, said: "BCC has, right from the start of this recession, been very accurate in assessing the developing situation.

"What is especially exasperating is that the survey shows UK businesses have the will and the facility to mitigate and begin to overcome the problems, but are being held back by factors outside their control."

The BCC says that while many businesses have continued to report positive trading, the UK economy was likely to shrink in 2012 because of the "deteriorating global environment".

It called on the government to introduce short-term stimulus measures and radical long-term policies for growth.

Mrs James said the business community had always accepted the need for deficit reduction and worked within the parameters of domestic austerity measures.

But no matter how enterprising companies were, commerce and industry could not thrive without the right economic conditions to encourage that enterprise.

She added: "It is becoming more evident as time goes on that austerity measures as employed at present cannot retrieve the situation; business development and expansion is the only way to recover the economy.

"Within the necessary constraints of deficit reduction, it is surely time for the government to introduce measures – whatever it takes – to create a climate more conducive to business enterprise."