UK recovery 'will be the best in the world': Once-sceptical experts predict strongest growth in G7 Recovery will trigger interest rate rise near end of next year, says think tank Bank of England yesterday set rates at 0.5% for 59th consecutive month But some fear recovery is driven by housing market and not exports Britain will be the best performing major economy in the developed world for the next two years, experts predicted yesterday. Output in the UK is forecast to grow by 3 per cent in 2014 and again in 2015 - making it the "leader of the pack" among the leading Group of 7 nations. The recovery will trigger a rise in interest rates towards the end of next year, according to the report by research group Capital Economics. Money: Britain will be the best performing major economy in the developed world for the next two years, predicted experts from a conservative-leaning economic think tank yesterday "The UK economy has leapt towards the top of the international growth table and there are good reasons to think it can stay there," it said. The conditions for a sustained period of solid growth would appear to be in place for the first time in six years. Capital Economics has for a long time been pessimistic about the outlook in the UK and as recently as last June was expecting growth of just 0.2 per cent for 2013 and 1.5 per cent for 2014. Robust growth between now and next year's general election would be a major boost for David Cameron and George Osborne following years of economic disappointment. Capital Economics forecast growth of 2.5 per cent and 3 per cent in the United States over the next two years and just 0.5 per cent and 1 per cent in the eurozone. Kevin Daly, an economist at Goldman Sachs, said: "The UK is now the fastest-growing advanced economy in the world. The improvement in growth has been phenomenal. But while an interest rate hike would be welcome for Britain's army of savers, it would be a blow to millions of borrowers relying on low mortgage costs to make ends meet. The Bank of England yesterday set rates at an all-time low of 0.5 per cent for a 59th month in a row but speculation is mounting that a rise is on the way. Gross domestic product in the UK - the total output of the economy - is thought to have grown by nearly 2 per cent last year. That would mark the best year for the economy since 2007 when output rose by 3.4 per cent before crashing in 2008 and 2009 under Labour in the biggest boom and bust in British history. The economy is still around 2 per cent smaller than it was before the crash but experts believe output will finally pass its pre-recession peak later this year. Old lady of Threadneedle Street: The Bank of England yesterday set rates at an all-time low of 0.5 per cent for a 59th month in a row but speculation is mounting that a rise is on the way, which could devastate borrowers Rob Wood, a former Bank of England economist now at Berenberg Bank, said: "The recovery is snowballing. Business confidence is booming, strong growth is back, unemployment is falling and inflation is down. It is feared, however, that the recovery is being driven by the housing market and consumer spending rather than manufacturing, exports and investment by private businesses. Figures from the Office for National Statistics yesterday showed exports of British-made goods rose 2 per cent in November as trade with China hit a record high. The trade deficit with the rest of the world - exports minus imports - fell slightly from £9.7billion in October to a still stubbornly high £9.4billion in November. David Kern, of the British Chambers of Commerce, said: "Boosting exports must be a national economic priority."