Britain's economy is set to return to a period of growth in the second half of 2012, a new report has indicated.
The Ernst & Young ITEM Club's latest quarterly forecast published this morning (16 July) has predicted that a combination of rising consumer spending and declining inflation will lift the country's financial system during the latter stages of the year.
Indeed, the group anticipates that inflation will dip below the government's targeted level of two per cent to a figure of 1.7 per cent before the beginning of 2013 which, in turn, will boost the spending power of Britons.
For instance, the report predicts that disposable household income will go up by 0.4 per cent in 2012, before then accelerating to growth of 1.5 per cent next year.
Peter Spencer, chief economic advisor to the ITEM Club, added that while the eurozone crisis "remains a major risk", conditions on the continent are showing signs of improvement.
By Claire Archer