According to the British Chamber of Commerce (BCC), the UK economy is set to exceed its pre-recession form one quarter earlier than expected as a result of business investment and a services surge.
The BCC’s original forecast for GDP growth this year was 2.7% but this has now been upgraded to 2.8%. This means the pre-recession figure will be overtaken in the second quarter of 2014, rather than the third as initially predicted.
The positive predictions also continue into next year. The first growth prediction for 2015 of 2.4% has now been increased to 2.5%.
“Our economic recovery is gaining momentum. Businesses across the UK are expanding and creating jobs and our increasingly sunny predictions for growth are a testament to their drive and ambition,” claimed John Longworth, BCC director general.
“Our new forecast shows that the service sector is performing particularly well and is likely to be a key driver of growth,” he added.
However, Longworth also claimed that “Britain is simply not investing enough” in businesses and levels will remain below pre-recession figures for a while.
Despite this, BCC said business investment is set to grow by 6.6% in 2014 and 5.7% in 2015 and 2016.
The Chamber’s director general took the announcement of these “sunny” figures as an opportunity to encourage Chancellor George Osbourne to incentivise businesses to hire young people so that “the next generation of workers is not left behind.”
The new predictions state that overall unemployment will fall from 7.2% to 6.8% in 2015, while youth unemployment (16-24) will fall from 19.9% to 17.8%.