This follows a 10.2% contraction in UK business investment last year, with investment expected to rise by 10.5% in 2022.
EY outlined that the economy is set to benefit from the end of Brexit uncertainty in many sectors and the possibility of renewed consumer spending.
Peter Arnold, economic advisory partner at EY UK, said: “The prospects for UK business investment are looking much better coming out of the pandemic than at any point since before the financial crisis.
“In context, while the decline in business investment in 2020 was significant, it shouldn’t be over-emphasised: it was only slightly deeper than the pandemic-driven 9.8% fall in GDP.”
He added: “By contrast, the 15.3% decline in business investment in 2009 amid the financial crisis was three times greater than the 4.1% GDP contraction that year.
“A key factor supporting business investment this time around is that the pandemic did not limit bank lending in the same way that we saw during the financial crisis – instead, we saw the opposite.”