The UK economy will return to its pre-recession size by the summer, the British Chambers of Commerce (BCC) says.

Gross domestic product hit a peak in 2008, before dropping smartly in the aftermath of the credit crunch, which began in earnest that year.

The BCC upgraded its estimate for UK economic growth in 2014 from 2.7 per cent to 2.8 per cent, a healthy rate for a developed economy.

In 2015, the economy will grow by 2.5 per cent, it added.

But BCC chief John Longworth warned that it was not time to break out the champagne glasses just yet, with levels of youth unemployment still “unacceptably high”.

"Major issues remain, such as the unacceptably high level of youth unemployment,” he said.

"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."