The UK economy will see strong growth this year thanks to a booming financial services industry and increasing business investment, an influential new report claims. Dan Martin reports.
The Ernst & Young ITEM Club, which bases it forecasts on the Treasury's own model of the UK economy, predicted 2.9% growth in 2007.
"Stock exchange and M&A transactions have been steaming ahead and business investment has picked up in the last twelve months, helped by the buoyant economy and rising profitability," said Peter Spencer, chief economic advisor to the ITEM Club. "The ITEM forecast shows business investment growing by another 7.5% in 2007.
"Simultaneously the post-millennium surge in buy-out activity and delisting spurred by private equity firms mean that a large swathe of UK plc has now been...