EY ITEM Club has predicted that inflation and interest rates will remain low for at least a further 15 months. The spring forecast from the ITEM Club expects the economy to show “decent but unspectacular growth” up until the end of the year. But the group has warned that the FCA must use its powers to restrain over-enthusiastic homebuyers and stop them borrowing more than they can afford. Peter Spencer, chief economic adviser to the ITEM Club, said the FCA’s powers to police mortgage lending would “head off problems when interest rates rise”. The report predicts that inflation will average 1.6% in 2014 while wages will rise by an average of 1.7%, bringing to an end a long period in which prices have risen faster than incomes.