That is the estimate of a new report by Ernst & Young ITEM Club, which forecasts that the inflationary pressures which have been battering household incomes are now easing much quicker than expected.
As long as commodity prices remain subdued, the organisation expects inflation to hit 1.7 per cent by the end of the year, giving consumers extra cash in their pockets to spend on the high street.
Though business investment is only predicted to return to pre-recession peaks in 2015, there is a chance that businesses could surprise on the upside, says Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club.
He noted that the prospect of a durable UK recovery remains heavily dependent upon confidence in financial and business communities and it is going to take time to re-build.
"However, a resolution of uncertainty about the Euro could transform the outlook, pushing company spending up much faster than forecast," Mr Spencer added.
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Posted by John Oak and Wayne Bly
Source: The Sales Director News