The Confederation of British Industry has announced "organic growth" is beginning to return to the UK economy with one per cent growth forecast for 2013.
It forecast GDP growth of one per cent in 2013, slightly down from its previous forecast of 1.4 per cent, and GDP growth of two per cent in 2014.
The reason for the reduction in growth forecast was the weaker-than-expected growth rate in the fourth quarter of 2013.
Inflation is expected to rise higher over the next few months but will fall back in the second half of 2013 and then be close to the Bank of England's two per cent target in 2014.
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However, business confidence and business growth remained low due to concerns over external risks in the Eurozone and further afield.
CBI director-general John Cridland said: "We are beginning to see the return of organic growth, with clear signs that firms offering the right products into the right markets are growing sales and expanding.
"The potential for Eurozone tensions to flare up again, coupled with tough conditions in the domestic market, explain why business confidence remains patchy. After the uncertainties of 2012, the fear of external storm clouds lingers.
"The recovery is a long drawn out process of adjustment, alongside deficit reduction, but there's still scope for policy to provide support."

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