The economy will grow by 2.5 per cent in 2015, and 2.4 per cent in 2016, according to the National Institute of Economic and Social Research (NIESR).

The NIESR have predicted that unemployment will stabilise at about 5¼ percent and said that the CPI inflation rate remains close to zero for most of the year. Future productivity growth remains the largest single uncertainty facing the UK economy.

The institute have released the following statement:

“Although growth in the first quarter of 2015 was considerably weaker than expected, this is likely to be a temporary deceleration. We expect growth to rebound through the remainder of this year.

“Faster than expected productivity growth would boost output, raise living standards and ease fiscal pressures; even slower than forecast productivity performance would make matters considerably worse. Employment growth continues to be strong; we expect unemployment to fall to about 5¼ per cent at the end of the year.

“Our projections assume the government sticks to the fiscal plans set out in Budget 2015. However, in practice, any future government is likely to pursue a somewhat looser fiscal policy. As our earlier work shows, this would lead to slightly higher growth and employment for the next few years, combined with slightly higher short-term interest rates and a slower rate of reduction in the deficit and debt to GDP ratio – relatively modest effects compared to other uncertainties highlighted above.”