ICAEW's first economic forecast report points to a fall in UK GDP of -0.5% for 2012, with 'very weak growth' for 2013.
The forecast predicts business investment will drop by 0.9% next year, and dubs the Office for Budget Responsibility's own business investment growth forecasts of 6.4% as unrealistic.
Other key points of the report suggests that the dole queue will remain virtually static as employment numbers show zero growth in 2012 and a only paltry uplift of 0.4% in 2013 as private sector job creation struggles to offset public sector losses. Unemployment, meanwhile will average 8.1% in 2012 and nudge up slightly to 8.4% in 2013.
However, it predicts total pay growth of 1.9% in 2012 and 1.8% in the following year.
It also highlighted the BCM Confidence Index, which stood at +1.1 in Q3 2012, down from +12.0 the previous quarter - the fourth largest quarterly decline since the index began.
Robin Fieth, ICAEW executive director for members and operations, said: 'In this low growth economic environment, we are seeing businesses adapting to a new normality. As businesses are not confident about the future, they are reluctant to invest, reluctant to increase pay and are more cautious in their future aspirations.
'There needs to be greater urgency about the government's growth agenda, a greater determination to implement reforms more quickly and a real emphasis on why the UK is now such a great place to do business.'
The body said it will be calling in its submission to the chancellor for his Autumn Statement, due in early December on a number of key issues. They include a new Office of Regulatory Reform (ORR) to improve the UK's regulatory environment and be able to comment on EU regulations or regulations made by independent regulators - something the current body, the Regulatory Policy Committee (RPC), is unable to do.
It also calls on UK Trade & Investment (UKTI) to improve access to export information, urging that more effort is made to support companies looking to grow exports beyond traditional markets.
The organisation also wants to see a new start-up division at BIS, to complement the 'Business in You' campaign, to support business development and improve new businesses survival rates.
The ICAEW's economic forecast was derived by gleaning the views of chartered accountants running all types of business across the UK. They were surveyed through the quarterly ICAEW/Grant Thornton Business Confidence Monitor (BCM).