The UK faces a “grim” economic outlook even though it has entered the early stages of recovery, with a high risk of a relapse, the British Chambers of Commerce has warned.

At what it called “a critical point” in the UK economic cycle, the BCC said on Sunday it was more pessimistic about the 2009 fall in gross domestic product than it was three months ago but it had revised upwards its growth estimate for 2010 and believed unemployment would increase at a reduced pace.