British economic recovery gains traction

Britain’s economic recovery is gaining traction as business investment helps growth broaden, EY’s Item Club will say in its latest forecast, to be published today.

British GDP will increase 3.1% in 2014, the London-based accounting firm will say, revising up a forecast of 2.9% published in April. That puts Britain on track to be the fastest growing economy among the Group of Seven nations this year with the balance of growth shifting to business investment from consumer spending.

“The UK has hit the sweet spot,” Peter Spencer, chief economic adviser to the EY Item Club said. “Investment is being ramped up, generating over half of the growth over the last year, and helping to rebalance the economy away from consumption. Underpinned by a strong labour market that provides the best of both worlds.”