Global research firm, Ernst & Young has upgraded the forecast for economic growth in the UK to 1.1 per cent this year compared to a forecast of 0.6 per cent made in April.

The Ernst & Young Item Club, which is based in London, said that the UK economy is expected to grow 1.1 per cent this year and the growth will rise to 2.2 per cent next year and 2.6 per cent in 2015. All the estimates are higher than those predicted in the month of April as the British economy shows signs of recovery.

Experts have said that the British consumers will increase spending and the recovery in the housing market as well as improving global economic situation will benefit the UK economy. Consumer spending is expected to rise 1.6 per cent this year as the savings rate falls to 5.6 per cent from 6.3 per cent in the UK.

"It's looking much more positive. Spending on the high street is holding up nicely, housing-market transactions are beginning to gather pace and, perhaps most significantly, the global economy also appears to be on the mend," Peter Spencer, chief economic adviser to the Item Club.

Meanwhile, in a major boost to the government's efforts to improve growth in the UK, the International Monetary Fund has said that it expects the British economy to grow at a faster rate than expected. The IMF now expects the economy to grow at 0.9 per cent this year compared with the 0.6 per cent forecast made in April. The agency has kept its forecast for growth of 1.5 per cent in 2014 unchanged for the country.