The National Institute of Economic and Social Research (NIESR) said on Wednesday that it expect Britain's economy to expand 2.5% in 2015, driven by consumption and business investment.

The think tank also expects the inflation to remain around zero throughout the rest of this year, while the unemployment rate is expected to run in the range between 5.0% and 5.5%. A stronger pound and low oil prices weigh on the inflation.

The inflation is expected to increase toward the BoE's 2.0% target by 2017.

The NIESR said that the BoE will start raising its interest rate in the first quarter of 2016 and will reach 2% per annum by 2019.

An absolute budget surplus is expected to be reached in 2019-2020.