The UK economy may slow down in the next couple of years, even while the world economy picks up, a report says.
The National Institute of Economic and Social Research (NIESR) revised up its forecasts for UK growth to 1.7% this year and 1.9% in 2018.
However, both would still be a slowdown from the growth rate of 2% recorded for 2016, when the UK was the world's fastest growing developed economy.
NIESR predicted inflation would rise too, hitting household spending.
"Robust consumer spending growth was behind the economic momentum of 2016," said Simon Kirby, head of macroeconomic modelling and forecasting at NIESR.
He said households would see their purchasing power "eroded" this year and in 2018 due to sharply rising prices.
Pound devaluation
The NIESR, widely seen as the UK's oldest independent research body, thinks inflation will jump from an average of 1.2% recorded over the course of 2016, to 3.3% this year then back down to 2.9% in 2018.
Price rises will be stoked, the body argues, by the sharp devaluation of the pound after the UK's Brexit vote last June.
The institute thinks the Bank of England will ignore this "temporary" pick-up in inflation and keep interest rates unchanged at their current historic low point, of just 0.25%, until the middle of 2019.
The Bank of England will announce its latest decision on interest rates on Thursday.
