UK Economy Growing Faster by the Month as Recovery Solidifies

Britain's economic recovery is growing faster every month, according to a report.

The National Institute for Economic and Social Research (NIESR) said in its monthly GDP forecast that the UK economy grew by 1% in the three months to the end of April, up from 0.8% in the quarter to 31 March.

That means output would be just 0.17% below its previous peak in early 2008 as the economic recovery strengthens.

"Subject to data revisions and the uncertainties surrounding any out of sample predictions, it can reasonably be expected that the peak will be regained within the next month or so," said the NIESR.

In a separate forecast, the NIESR said the UK economy will grow by 2.9% in 2014. That would be the fastest rate of any western country.

However, the influential thinktank also said that real wages are still 6% below their peak – and will not reach it again until 2018.

Stagnant wages have been a focus of the political debate in the UK. While the government is keen to point to the gathering recovery, the opposition Labour party has bemoaned what it calls the "cost of living crisis" with prices rising faster than wages.

There are also concerns about the make-up of the recovery. Critics of the government say it has been too reliant on consumer spending, as households whittle down savings, and the revival in the housing market.

But there are signs that the recovery is broadening out. Several business surveys, including a poll by Deloitte of chief financial officers, has found a growing appetite for investment.

And global demand is recovering as markets such as the eurozone start to emerge from the economic darkness, which is expected to boost UK exports.

The UK economy grew by 0.8% in the first quarter of 2014, according to a preliminary estimate from the Office for National Statistics (ONS). That's up from 0.7% in the previous quarter.