Economic conditions in 2013 will be a slight improvement on those in 2013, according to analysis by the Forum of Private Business (FPB).
Phil Whyman, spokesman on economics at the FPB and an economics professor at the University of Central Lancashire, said growth will be sustained at around one per cent or perhaps slightly less, so the recovery will continue although the year will still be quite tough.
"Sluggishness is a feature of financial crises, as those firms and consumers who over-borrowed in good economic times start to pay off some of their debt, while financial sector firms, having got their fingers burned by being too incautious, use available capital to strengthen their own balance sheets rather than lend to small businesses," he said.
"The Eurozone crisis is also far from resolved, undermining the anticipation of an export-led recovery being based on trade with our closest neighbours."
Whyman's forecast is slightly lower than the CBI and ONS predictions of 1.2 per cent and 1.4 per cent respectively. He thinks the depth of the recession in the Eurozone, the UK's largest trading partner, will slow things down.
"The Bank of England predicts that it will not be until 2015 at the earliest that the UK national income will have recovered to the levels last seen before the 2008 financial crisis," he added. "Given the lack of budgetary stimulus, the unwillingness of the Bank of England to engage in further quantitative easing for the time being, and the fragile state of the UK economy, I expect the UK economy to grow by less than one per cent next year."
Whyman also said he'd like to see the government try to stimulate growth, particularly by lending to small businesses -- which he said must be achieved "by any means possible". A programme of reskilling -- including rolling back certain recent higher education reforms -- to improve the labour pool could also be helpful.
"And they could move quickly to stimulate the construction sector by engaging in infrastructure and house building projects which will be needed by the economy of the 21st century," Whyman said.
"This should be a good time to agree contracts for these investments, as large parts of these industries lie idle but, should competition not provide low prices and value for public investment, there is nothing to stop the public sector from either building things itself, or alternatively setting up alternative, perhaps co-operative, organisations to provide houses to meet social need, as occurs in many other European economies."
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