Inflation and interest rates will stay low into 2015 despite wage increases finally beginning to outstrip inflation, a group of economists says.

According to the closely-watched EY ITEM Club, wages will grow 1.7 per cent in 2014, while inflation will level off at 1.6 per cent, indicating a slight ‘real-terms’ increase in salaries.

It will lead to “decent but unspectacular” growth of 2.9 per cent, not enough to convince the Bank of England to put up interest rates until at least the summer of 2015.

The news will be welcomed by people and businesses with loans pegged to the Bank’s base rate. EY also said when rates start moving upwards, they will do so very gradually.

Peter Spencer, chief economic advisor to EY ITEM Club, said: “Until now the recovery has been financed by a fall in the amount households save, but it appears to be moving to a firmer footing.

“The consumer upturn will be given a boost from real wages and rising employment, while investment is finally kicking in.

He added: “We are set for a long period of low inflation as pressures from commodity prices and the labour market – traditionally the two main suspects in the UK inflation drama – remain largely absent."