UK economy ‘will grow 2.8% this year, despite election’

The UK economy will take uncertainty created by the general election “in its stride” and grow by 2.8 per cent this year, the EY Item Club says.

The consultancy’s spring forecast, which uses HM Treasury’s economic modelling, predicts gross domestic product will hit 2.8 per cent this year and 3 per cent in 2016.

This is significantly higher than the official Office for Budget Responsibility estimates laid out in this year’s Budget, which suggested GDP growth would be 2.5 per cent in 2015 and 2.3 per cent in 2016.

EY Item Club chief economic adviser Peter Spencer says: “The economy is taking the election in its stride as ‘noflation’ trumps politics. The eurozone recovery is bedding in and completes the positive UK growth picture that we anticipate for 2015 and 2016.”