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Earlier this week, NIESR forecast that Britain's economy would grow by 1.9 percent this year and next - slightly faster than the Bank of England predicted on Thursday.
"At this speed, the economy could start to overheat unless the Bank of England withdraws some of the stimulus that it has injected by raising the policy rate," NIESR economist Amit Kara said.
A failure of Brexit talks would cause "a marked slowdown with damaging longer term consequences", Kara added.