The economy will grow by 1.4% this year, rising to 2.4% in 2014, according to a report by the EY ITEM Club, the Daily Mail reports.
The independent forecasters, sponsored by accountancy group EY (formerly known as Ernst & Young), also predicted a recovery in the housing market, with more than a million transactions this year and prices up 3.5% in 2013 and 6.5% in 2014.
But the report dismissed criticism that the governments’s Help to Buy mortgage initiative might fuel a housing bubble as ‘hysteria’.
Peter Spencer, chief economic adviser to EY ITEM, said: “Despite recent criticism of these initiatives, the chances of seeing another housing market bubble are extremely slim.
‘House prices and transactions are only just recovering from the credit crunch and will be paltry in comparison to those of a decade ago.’
The report, out in full today, will highlight how rising consumer spending, which is increasing faster than incomes, is the key driver of the economic growth.
Its one warning is that this alone will not sustain recovery.
