Economy will match peak levels of 2008 this summer

The UK economy will reach pre-recession levels this summer, according to a business lobby group.


The British Chamber of Commerce (BCC) believes that the second quarter will see GDP levels exceed those seen before the financial crisis in 2008; a quicker recovery than first predicted.


It has altered its estimates for growth to 2.8% – up from its earlier prediction of 2.7% – although the BCC added that high levels of youth unemployment are still a cause for concern.


“Our economic recovery is gaining momentum,” said BCC director general John Longworth.


“Businesses across the UK are expanding and creating jobs, and our increasingly sunny predictions for growth are a testament to their drive and ambition.”


The last forecasts – made last autumn – predicted that growth would reach pre-recession levels by this autumn but those predictions have been brought forward.


Its growth forecast for 2015 has also improved, increasing from 2.4% to 2.5% with these improvements great news for businesses who have struggled throughout the recession.


Companies that chose to undergo business restructuring will be especially pleased, as the improving economy justifies their decisions.


At the same time, the BCC also predicts that interest rates in the UK will rise at the end of 2015, to 0.75% from their historic low of 0.5%.


Chancellor George Osborne is expected to announce the recent set of changes in his budget speech later this month.


Meanwhile, the BCC’s findings are echoed by accountancy firm BDO who said improved confidence and a higher proportion of businesses expected to recruit in the coming months was responsible for their own forecast upgrade.


Reports that wages will grow above the rate of inflation from the middle of 2014 also bring positive news to businesses while the Federation of Small Businesses (FBS) has reported widespread confidence among firms.


The FSB said that one in seven businesses is expected to hire new staff in the coming months while an increasing number are also looking to access finance.


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