The UK will avoid falling into a 'triple dip' recession but external forces still threaten the economy, according to the Confederation of British Industry (CBI).
The business lobby group said the country's economy will grow 0.3% in the first quarter of the year. The economy shrunk in the last quarter, and it had been feared it would be the start of six months of negative growth.
The CBI now predicts the UK to grow 1% in 2013, the BBC reports. But this is down from 1.4%.
"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," said CBI director-general John Cridland.
"Recent business surveys also give grounds for cautious optimism about our forward prospects."
However, he added external "storm clouds", such as the eurozone debt crisis and weak global growth remained a danger to the economy.
The CBI expects inflation to rise in the UK, but does not predict more quantitative easing.
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