ITEM club predicts jump in UK growth

Suzie Neuwirth

UK GDP is expected to grow by 1.1 per cent this year, according to the ITEM Club.

The Ernst & Young-sponsored forecasting group attributed its prediction – a big jump from a 0.2 per cent rise in 2012 - to an increase in consumer confidence, particularly in the housing market.

“This time around the recovery looks much more sustainable, and should be given legs by a rebound in business investment and exports from 2014,” said the report.

“Combined with a continued revival in consumer confidence and spending, these factors will see UK GDP growth accelerate to 2.2 per cent in 2014 and 2.6 per cent in 2015.”

However, the firm warned that US plans to taper quantitative easing and an economic slowdown in China could present risks.