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Growth will more than double in the West Midlands this year and the region will outperform most outside London, according to a new report.

The West Midlands' economy will grow by 3.1 per cent in 2014 – revised up from 2.6 per cent earlier this year, and compared to 1.6 per cent last year, according to PwC's latest º£½ÇÊÓƵ Economic Outlook report.

This is in line with the predicted growth for the º£½ÇÊÓƵ economy, at around three per cent in 2014, which is expected to ease slightly to 2.6 per cent in 2015 as consumer spending growth moderates.

Mark Smith, regional chairman at PwC in the Midlands, said: "These latest figures show the West Midlands economy is now gathering real momentum as business investment starts to pick up.

"The unemployment rate in the region has also fallen faster in 2014 than any other º£½ÇÊÓƵ region, falling by 57,000 over the past year.

"In addition, inflation has fallen faster than expected recently and we expect it to remain at or slightly below target in 2014-15.

"As a result, we expect the MPC to keep interest rates on hold in the short term but then to increase them gradually from late 2014 or early 2015 onwards, perhaps returning to around four per cent by 2020.

"While higher interest rates will help savers and reduce pension fund deficits, households need to bear in mind likely future interest rate rises in any decisions on mortgages or other longer term loans."

While 3.1 per cent growth is predicted for the West Midlands, London and the South East are higher, at 3.4 per cent and 3.3 per cent respectively, while it is expected to be three per cent in the South West, East Anglia and Yorkshire, 2.9 per cent in the North West and 2.5 per cent in the North East.

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