UK business investment will double this year to reach heights not seen since before the recession, according to figures from accountancy body ICAEW.

The body has upgraded its growth forecast from 3.3% to 3.4%, stating that their main reason for doing so was increased business confidence.

In the ICAEW’s latest economic forecast, they have estimated that GDP growth will double this year to 3.4% from 1.7% in 2013.

Michael Izza, chief executive at ICAEW, said:

“Unemployment is falling, and wages are keeping pace with inflation for the first time in years, so there is much to be happy about. Business investment is also rocketing, albeit from a low base, which will allay fears that the recovery is wholly based on consumer spending.”

In terms of unemployment, the ICAEW forecast that the unemployment rate will reach an average of 6.4% in 2014, with 450,000 private sector jobs being created in the coming year.

They also said that the average employee will see a £90 increase in their real gross annual income, but that this would still be almost £2,000 less than pre-crisis levels.

Although experts are seeing these figures as generally positive, Mr Izza warns that problems could be ahead that may potentially slow the recovery.

He added:

“Domestic sales are still outstripping our exports, and the rebalancing of the economy that is so often talked about could turn out to be a myth if that continues.”

Image by Peter Allen