The UK economy is still growing at a slower rate than the government has predicted, according to an economic think tank. The Ernst & Young Item Club, which uses the Treasury's model of the UK economy to make its forecasts, said the economy is struggling against a weak global recovery and slower household spending.
"The outlook remains very unclear despite the ending of uncertainty about the Persian Gulf," said the club's latest half-year economic report.
The Item Club is an independent economic forecast group formed of different companies sharing the cost of forecasting, and sponsored by Ernst & Young,
Its latest forecast is that the UK economy will grow by 1.7% this year, rising to 2.5% next year - a gloomier projection than that of the Chancellor Gordon Brown, who earlier this year predicted 2-2.5% growth in 2003 and 3-3.5% in 2004.
