In its latest prediction, the National Institute of Economic and Social Research (NIESR) said the recovery is faltering despite the economy growing by an estimated 0.7% in the first quarter of this year.
It said Britain had probably only achieved “weak” average quarterly growth of 0.1% over the last six months.
Robust growth since January had done little more than recover output that was lost in the final weeks of 2010 when heavy snow disrupted the economy, it said.
The thinktank said the fragile situation made it almost certain the Bank’s Monetary Policy Committee (MPC) will leave interest rates unchanged at noon today.
“This strong figure for the first quarter of this year is flattered by the economic impact of the adverse weather in the final quarter of last year,” said the NIESR.
“With the state of the recovery uncertain we expect the MPC to maintain the current monetary policy stance.”
Meanwhile, a poll by Reuters finds Simon Ward, Henderson’s chief economist, once again the only one of 67 forecasters predicting a rate rise today.
The latest industrial output figures also suggested the economy is running out of steam, having initially rebounded strongly from last December’s wintry weather.
Figures from the Office for National Statistics showed a 1.2% drop in British industrial output in February. Manufacturing output was flat month-on-month, disappointing City analysts who expected growth of around 0.6%.
