British Chambers of Commerce have revised their UK gross domestic product forecasts, bringing forward the date by which GDP is expected to overtake its pre-recession peak.
Growth forecasts for the coming two years have been raised, to 2.5% for 2015 and 2.8% for 2014 – both increases of 0.1 percentage points.
That has GDP overtaking its pre-recession peak in the first half of this year, one quarter ahead of the previous prediction.
However, despite a return to positive wage growth in real terms (accounting for inflation) around the midpoint of 2014, unemployment among the youngest age groups is expected to remain at three times the national average until at least 2016.
John Longworth, director general of the BCC, says: “It’s not time to break out the champagne glasses just yet. Major issues remain, such as the unacceptably high level of youth unemployment.
“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.”
BCC have also made their first published forecast for 2016, which is initially expected to match the revised growth figure for 2015 at 2.5%.
In terms of unemployment, BCC predict the national average – measured at 7.2% in the fourth quarter of 2013 – will drop to 6.0% by the end of 2016.
However, unemployment among 16 to 24-year-olds was 19.9% in Q4 2013 – 276% of the national average – and is predicted to be 17.8% by Q4 2016, almost exactly three times the nationwide picture.
BCC chief economist David Kern adds that business investment is not being encouraged by members of the Monetary Policy Committee, some of whom are hinting at the possibility of an increase in the base rate in the coming months.