FTSE 100 opens tentatively higher on Item Club report

The FTSE 100 index in London has started the week's trading today (October 15th) tentatively higher following an optimistic report on the state of the economy.

Ernst and Young's Item Club has forecast that the UK will see growth in the second half of 2012, however its quarterly expectations – which are compiled using the same model as the Treasury – still state there will be a 0.2 per cent contraction over the year as a whole.

It claims economic expansion will be 1.2 per cent in 2013 and that this will increase to 2.4 per cent in 2014-15, as higher consumer spending, a better jobs market and falling inflation benefit more households.

However, the Item Club stated the UK's trade performance in 2012 has been disappointing, offsetting the positive impact of lower inflation and improving employment figures.

At 08:25 BST, the FTSE 100 was higher by 0.1 per cent to an index value of 5799.2 points.

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