Image copyright Getty Images Image caption More and more firms are expanding and creating jobs, the BCC says

The size of the overall UK economy will this summer overtake the peak level it was at before the 2008 financial crisis, a business lobby group says.

The British Chambers of Commerce (BCC) thinks the second quarter, starting in April, will see GDP exceed the level seen at the start of 2008.

In upgraded forecasts, it estimates economic growth will be 2.8% this year - up from its earlier estimate of 2.7%.

But it also warns of an "unacceptably high" level of youth unemployment.

'Sunny predictions'

"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."

Media playback is unsupported on your device Media caption John Glen, Cranfield School of Management: "The BCC are actually being quite conservative"

In December, the BCC forecast economic growth would reach pre-recession levels by the autumn.

It has also upgraded its growth forecast for 2015, from 2.4% to 2.5%.

These more optimistic forecasts, the BCC says, are mainly due to upward revisions to historic GDP data by the Office for National Statistics (ONS).

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%.

'Major issues'

It expects further modest increases will see the rate rise to 1.5% by the second half of 2016.

But Mr Longworth warned it was not "time to break out the champagne glasses just yet".

He added: "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."

He also called for more business investment and better access to finance for companies.

The BCC forecasts are echoed in a separate report, from accountants BDO.

It says strong growth is being helped by increased optimism and improved hiring intentions, particularly in manufacturing.

Budget backdrop

Like the BCC report, BDO's analysis predicts wages will grow above the level of inflation from the middle of this year.

Separately, in a report on business confidence, the Federation of Small Businesses (FSB) said one in seven smaller companies wanted to create jobs in the next three months.

Image caption The upbeat forecasts come the week before the Budget

The FSB also said a growing number of companies were getting access to finance.

The upbeat reports follow encouraging economic data in recent months, and provide a positive backdrop to Chancellor George Osborne's Budget announcement on 19 March.

He is expected to announce an upgrade to UK growth forecasts from the Office for Budget Responsibility (OBR).

In December's Autumn Statement, the OBR forecast growth of 2.4% for 2014.