Bosses in Norfolk remain optimistic about the future economic outlook, but the government needs to do more to set business free and kick-start the economy, a business lobby group will urge today.

The latest quarterly survey from the British Chamber of Commerce (BCC) predicted the economy will grow by just 0.6pc this year.

The BCC said there was an 'encouraging' pick-up in growth in the past three months which means the UK will likely dodge another recession but warned the economic expansion is still 'much too slow'.

It forecasts unemployment will rise to 2.9m over the next year and said the government needs to take 'radical' steps to set businesses free, including creating a state-backed bank to boost lending to small and medium-sized enterprises (SMEs).

Other suggested measures include ramping up its credit easing scheme, scrapping this month's 5.6pc hike in business rates and speeding up the proposed improvements to transport infrastructure.

In Norfolk, firms in both manufacturing and services were optimistic about future recruitment, while export sales and orders in both sectors continue to improve with Norfolk, East of England and the national results all showing increases from 2011.

Norfolk businesses are also showing optimism in both turnover and their expected profitability for the next quarter and both sectors are also advising that investments in plant, machinery and training are also increasing:

Caroline Williams, chief executive of Norfolk Chamber of Commerce, said ministers should act to cut red tape more aggressively and do more to make the credit easing programme more effective to encourage loans to viable smaller firms.

'Norfolk and the rest of the UK has the potential to recover, but to achieve that the government has to set businesses free to grow.

'With domestic demand in Norfolk remaining weak and unemployment likely to increase over the next year, every effort must be made to boost growth and empower the private sector to create jobs,' she said.