LONDON Aug 5 Mounting evidence that Britain's economic recovery is becoming more entrenched prompted a leading think tank to bump up its 2014 economic growth forecast for the country on Tuesday.
The National Institute of Economic and Social Research (NIESR) said it expected the British economy to grow 3.0 percent this year, up from 2.9 percent in a previous forecast.
But while the economy finally outgrew its 2008 pre-crisis peak level in the second quarter, NIESR said it could take until 2017 until output per person recovers.
The research body reiterated that the puzzle of Britain's poor productivity levels - among the worst in the Group of Seven rich nations - was a cause for uncertainty.
The buoyancy of the housing market and growth in mortgage lending was the main concern in the near-term, said NIESR, adding that it was unclear what effect the recent interventions in the housing market by authorities would have.
As well as the introduction in April of tougher checks on whether borrowers can afford their mortgages, the Bank of England last month announced measures to prevent a build-up of risky home loans. (Reporting by Andy Bruce; Editing by Hugh Lawson)