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Contractors working through umbrella services will be happy to hear that a recent survey has predicted the UK economy will be much stronger in the second half of the year.

Umbrella company contractors might be interested to hear that Ernst & Young ITEM Club’s latest quarterly forecast, has revealed that we will all be enjoying an ‘Indian Summer’ as the economy will return to growth over the next six months, boosted by falling inflation and a pick-up in consumer spending.

Although the report has shown that unemployment is on the rise this could in fact benefit highly skilled contractors using umbrella services, as this could lead to more firms taking these types of workers on.

Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club, said, “The boost to household finances and the subsequent pick up in spending should be enough to push the UK back into positive territory this year, but don’t expect a consumer led recovery further out.

“Longer term, consumers are going to be more focused on reducing their debt burden rather than splashing the cash.”

The Ernst & Young research has predicted that business investment will only return to pre-recession peaks in 2015, but Spencer says there is a chance that businesses could surprise on the upside:

“The prospect of a durable UK recovery remains heavily dependent upon confidence in financial and business communities and it’s is going to take time to re-build. However, a resolution of uncertainty about the Euro could transform the outlook, pushing company spending up much faster than forecast.”

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