The Organisation for Economic Co-operation and Development (OECD) says further progress in UK living standards depends on higher productivity.
It says the UK’s growth rate is now the highest in the G7 leading nations at 2.6%, but output per worker needs to rise to maintain growth.
But wide-ranging government policies have aided recovery, the OECD says.
These include low interest rates, quantitative easing (QE) and support for the housing market.
In its latest report, the body says employment has recovered to its pre-crisis trend and is now at record levels. However, weak labour productivity since 2007 has been holding back real wages and, it says, well-being.
The sustainability of economic expansion and further progress in living standards rest on boosting productivity growth, which is a key challenge for the coming years.
Although government schemes to help people buy property had been helpful, there were also risks to watch out for, the OECD added.