The UK economy is set to “bounce back” to pre-pandemic levels by the end of the year, driven by household spending, according to the CBI.

Despite the delay four-week delay to the full easing of restrictions, the UK gross domestic product will grow by 8.2% this year, and 6.1% in 2022, says the business lobby group.

This is an upgrade from its December prediction of 6% by the end of this year and 5.2% in 2022, as the “rapid roll-out of vaccines and the unleashing of pent-up demand means that the UK economy is poised for considerable economic growth over the summer”.

The body says that “household spending is the linchpin of this recovery”.

It adds: “Consumer spending is bolstered by an improvement in real incomes, and households running down some of the excess savings built up over the last year.”

The body now also expects a much lower jobless peak at 5.5% in the third quarter of this year, compared to its previous forecast, which predicted a 7.3% unemployment rate in the second quarter of 2021.

CBI director-general Tony Danker says: “There are really positive signs about the economic recovery ahead this year and next. The data clearly indicates that there is pent up demand and ambition across many sectors.”

However, the CBI points out that in areas such as hospitality, live entertainment and travel, this summer spike “won’t be felt as strongly by those sectors still working under restrictions”.

The business group backed the extension of the government’s Job Retention Scheme into the autumn, but also called for continued relaxations on commercial rent and business rates relief.

On Monday, the government delayed the full easing of lockdown restrictions which had been set for 21 June, until 19 July, following warnings from scientists that the rapid spread of the Delta variant, first identified in India, risks a substantial third wave if unchecked.

There are still 3.4 million jobs on furlough, according to HMRC data released earlier this month.

Last week, industry leaders said they were braced against the prospect of thousands of mortgage holders emerging from government furlough schemes in September as vulnerable clients due to the pandemic.

“We have Covid, we have people coming off mortgage holidays and a number of people coming off furlough in September. We are going to have people moving into that vulnerable client regime,” said St James’s Place head of mortgages Paul Johnson. The wealth manager hosted a Mortgage Conference 2021 session on this subject on Thursday 10 June.

Also, last week, the UK economy grew 2.3% in April, its fastest monthly growth since July last year, as shoppers spent more on the High Street as non-essential shops reopened, according to official data from the Office for National Statistics.