Britain’s economic growth quickened slightly in the three months to the end of February and is on course to recover its pre-recession peak over the course of this year, a leading economic research body has estimated.

The National Institute of Economic and Social Research (NIESR) said Britain’s economy likely grew by 0.8 per cent in the three months to the end of February, compared with 0.7 per cent in the three months to the end of January.

That implies Britain’s economy is now only less than 1 per cent below its pre-recession peak in January 2008, NIESR said - although that is still a worse situation than almost all of Britain’s major economic peers.

Britain’s recovery to date has been driven by household spending and a revival in the property market, and the Bank of England wants to see more exports and business investment driving growth this year.

NIESR’s latest forecasts suggest the economy will grow 2.5 per cent in 2014 and 2.1 per cent next year, a little more pessimistic than the consensus of economists polled by Reuters.

NIESR also said it did not expect the Bank of England to hike interest rates until the second quarter of 2015.

BoE governor Mark Carney signalled today he was not concerned that Britain's economy was close to overheating, despite a strong recovery since last year, as he put himself in the dovish camp among policymakers.

Reuters