Ernst & Young has predicted that the UK economy will return to growth next year, buoyed by a housing market boost.
In its ITEM Club autumn economic forecast, Ernst & Young said the UK's Gross Domestic Product will come in at -0.2% for this year overall, before increasing to 1.2% in 2013 and 2.4% in 2014.
It said an improving outlook for consumers combined with an easing of credit conditions will also lay the foundations for a recovery in the housing market next year.
According to the report, housing transactions will bottom out this autumn, before recovering in spring next year, with prices set to follow.
"The latest credit conditions survey shows that one of the biggest headwinds facing the UK has now begun to ease – lending has started to loosen up and we're hopeful that the housing market is primed for a recovery early next year," said Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club.
"There are though plenty of 'ifs' and 'buts'. The big question is the extent to which consumers will choose to grasp the opportunity or continue to deleverage and to pay down their debts."
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