The Centre for Economics and Business Research (CEBR) has revealed that Britain’s economy will grow by 3.1 percent this year after a turnaround in household fortunes. However, the group warned that trade and austerity challenges still lie ahead.

The CEBR said a rising disposable income, business investments and a healthy construction sector boosted by a resilient housing market would help to catalyse the economic recovery in 2014. The CEBR’s predicted growth of 3.1 percent this year would be the strongest rate of annual growth since 2007, when GDP increased by 3.4 percent, before the financial crisis triggered a 0.8 percent fall in national output in 2008.

This forecast is upgraded from an earlier prediction of 2.8 percent and is more optimistic than that of the Treasury’s official and independent forecaster, the Office for Budget Responsibility, which last month predicted a lesser growth of 2.7 percent in 2014.

Eric Dole, Regional Director – Europe at Aquaterra, said: “The UK economy has remained strong through the first quarter of 2014, and we are looking forward to further growth for the rest of the year. With current growth levels beating predictions, combined with the recently announced tax break for North Sea oil groups in the 2014 budget, we are confident that 2014 will be a highly prosperous year for our industry.”