The UK economy will grow faster in 2014 than any other G7 economy, while low wage rises will ensure interest rates do not rise until next year, an influential report has forecast.
UK GDP growth will hit 3.1% this year, spurred by strong capital investment by businesses, the EY Item Club said.
Meanwhile rates will not rise until the first quarter of 2015, it predicted.
“After several false starts, this time [the recovery] could be different,” said EY’s chief economist Mark Gregory.
The Item Club raised its forecast for growth this year to 3.1% from 2.9% previously. This, it said, was due to an expected 12.5% jump in business investment.
This compares with 2% GDP growth in Canada and 1.8% growth in Germany, the body forecast.
Official figures show that UK GDP rose by 0.8% in the first three months of the year, the fifth consecutive quarter of positive growth. This represents the longest positive run since the financial crisis.
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