LONDON: The Ernst & Young ITEM Club , one of the UK's best-known independent economic forecasting groups, predicts that the nation's economy is set for strong growth this year, driven by the booming financial services sector and rising business investment.

ITEM - an acronym for Independent Treasury Economic Model - is sponsored by Ernst & Young, although the consultancy is not a member of the group. The Club was founded in 1977 by a number of major companies with the aim of sharing the cost of UK economic forecasting

The club predicts growth of 2.9% this year, judging the economy to be in "rude health". However, its members say that meeting inflation targets is essential if the nation is to avoid interest rate rises.

In particular, says the Club, wage settlements must be kept in check - although it urges no such restraints on shareholder dividends or executive pay deals.

Data sourced from BBC Online (UK); additional content by WARC staff