One of Britain’s top think tanks has upgraded its growth forecasts for the UK economy, in a move that threatens to deal another blow to widespread predictions that Brexit would deliver a serious shock to Britain.

Tearing up forecasts it made just a few months ago, the EY Item Club has lifted its UK GDP estimates for 2018 to 1.7pc, up from the 1.4pc predicted in its Autumn Forecast in October last year.

Its team of economists has also acknowledged that growth in 2017 was better than expected at 1.8pc. Momentum from 2017 is now expected to carry into this year, the think tank said.

A let-up in the consumer spending squeeze and the chances of a near-term Brexit transition arrangement had improved the outlook for economy, it said. Both are expected to boost UK growth this year, along with falling inflation and higher company profits.

Last week, the government stoked fresh controversy over its gloomy Brexit forecasts when new official documents were leaked claiming that the UK will be considerably worse off in 15 years’ time regardless of which deal is signed with the EU.