The Centre for Economics and Business Research (CERB) raises its growth forecasts for the British economy to 1.8% expansion in 2010 from 1.5%, and 1.5% from 1.4% this year, noting that there is 20% possibility the UK will fall back into recession due to the surge in unemployment and inflation.

CERB expects growth to reach 1.1% in 2011, while inflation is estimated to rise to 4.0% in 2011 before cooling to 1.6% by mid 2012.

It also predicts the BoE to expand the APF beyond the current 200 billion pounds to boost the economy that may be affected by the sharp spending cuts announce d by the government.