The UK economic recovery is losing momentum but chances of a double-dip recession has been exaggerated, according to a report from the Ernst & Young ITEM club.

The report predicts that the economy will grow 1.4% this year and 2.2% in 2011 - but warns that it will slow in the coming months.

"The economy is likely to slow over the winter following a surprisingly positive first half of the year, but I think this will be a soft-patch, not a double-dip," said Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club.

Mr Spencer said that once the uncertainty was over, businesses would be more likely to relax and increase investment.

"Helping the UK out of recession has been a bit like peeling back an onion - removing one-by-one the risks to the economy in order to re-build business confidence."