The British Chambers of Commerce today downgraded its UK growth expectations for 2007 to 2.3 pct from 2.4 pct previously but predicted a pick up to 2.5 pct in 2008. The business lobby left unrevised its forecast of 2.6 pct growth for 2006. "The pace of growth is set to slow over the next year, because disposable incomes are being squeezed, global economic prospects are worsening, and UK interest rates are higher and could well increase further," the BCC said. It added that further rate hikes from the Bank of England will mean serious damage to economic growth. The Bank of England has made two quarter point rate hikes this year, in August and November, taking the benchmark repo rate to 5.00 pct. The BCC predicts that the CPI measure of inflation will average 2.3 pct in 2006 and 2007, higher than the 2.0 pct target the BoE is charged to keep. It expects CPI inflation to edge lower to 2.0 pct in 2008, however. It argued that the influx of foreign workers into the UK will only swell the number of jobless even though more jobs are being created. "Unemployment is likely to increase further over the next 6-12 months, as migration from Eastern Europe continues and output growth slows gradually," it said. It also weighed in against the rise in the minimum wage, saying that it would add to the number of jobless.