The UK’s economy will rebound in the second half of the year, the Ernst and Young Item Club’s latest report says.
However, its quarterly forecast, which is produced using the same model as the UK Treasury, still predicts that the economy will contract by 0.2% over the year as a whole.
The Item Club report says that the country’s trade performance has been deeply disappointing.
This has offset the positive effects of lower inflation and rising employment.
The forecast is more optimistic than the International Monetary Fund’s assessment released last week, which predicted that the UK economy would shrink by 0.4% this year.
The Item Club says economic growth will be 1.2% next year and 2.4% in 2014 and 2015, fuelled by higher consumer spending as a result of falling inflation and a better jobs market.
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