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UK Economy to hit pre-recession peak by the summer

posted 10 Mar 2014, 04:18 by Richard White

The size of the UK economy will by this summer overtake the peak level it reached before the 2008 financial crises according to a business advocate group.

The British Cambers of Commerce (BCC) believes that by the end of the Quarter Ended 30th June 2014 GDP will be greater than that seen at the start of 2008.

The BCC has upgraded its forecasts predicting growth of 2.8% this year - up from its previous estimate of 2.7%, but it has still stressed that there are "unacceptably high" levels of youth unemployment.

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."

Key points from the BCC predictions include:

  • Consumer spending will be a major driver of economic growth for the next three years
  • The group also predicts the first increase in UK interest rates will come at the end of 2015, rising from their historic low of 0.5% to 0.75%.
  • It expects further modest increases will see the rate rise to 1.5% by the second half of 2016.
"We urge the chancellor to use this month's Budget wisely by incentivising businesses to hire young people so that the next generation of workers are not left behind." stressed Mr Longworth. He also called for more business investment and better access to finance for companies.