EY Item Club: Low inflation will help boost UK growth in 2015

The UK economy is set to grow 2.8% this year, helped by CPI at zero and a lower oil price, according to the EY Item Club.

It is forecasting growth of 2.8% for 2015, although this is a slight downward revision from an earlier forecast of 2.9%, due to weak GDP growth in the fourth quarter of 2014. UK CPI inflation has fallen to zero in recent months and is expected to average 0.1% this year, making it unlikely interest rates will rise from 0.5% this year. Low inflation combined with an improvement in employment numbers is lifting consumer confidence, the report said. The EY Item Club identified headwinds for the economy including a weak government and an EU referendum, but the organisation said the UK is p...