|Britain is on track to recover to its long term growth rate of around 2pc later this year, according to the Organisation for Economic Co-operation and Development.
The Paris based think tank said its composite leading indicators, which have a good track record of predicting changes in economic fortune six months in advance, pointed to growth being “around trend”.
Britain’s prospects have been improving since the end of last year, the OECD found, and growth is now picking up in most industrialised countries – including the eurozone.
The recovery is currently strongest in the US but the monthly indicator for all 33 OECD member countries inched up to 100.5 in February from 100.4 in January, slightly above the long-term average of 100. The eurozone remains below par but the OECD found signs of “growth picking up”.
The OECD’s improving outlook came as the World Trade Organisation slashed its forecast for growth of global trade from 4.5pc to 3.3pc this year. Trade grew by just 2pc last year.
WTO director general Pascal Lamy warned that 2013 could turn out even weaker than expected, particularly because of risks from the euro crisis, and countries might try to restrict trade further in a desperate attempt to shore up domestic growth.
“The threat of protectionism may be greater now than at any time since the start of the crisis, since other policies to restore growth have been tried and found wanting,” he said.
Mr Lamy, who will step down at the end of August this year, called the 2012 growth rate “sobering”.
The historical trend of long-term growth was 6pc for the 20 years leading up to the financial crisis, but now stands at 5.3pc. The WTO reckons trade growth will recover to 5pc in 2014.