The European Commission significantly raised the growth projections for the U.K. economy on Tuesday, citing improvement in private consumption and investment as well as slowing inflation. In its autumn forecast, the executive arm of the EU lifted the growth forecast for this year to 1.3 percent from 0.6 percent projected in May. In 2012, the economy grew just 0.1 percent. The outlook for 2014 was raised to 2.2 percent from 1.7 percent. In 2015, the British economy is expected to grow 2.4 percent. "Over the forecast horizon to 2015, growth is projected to improve with domestic demand remaining the main driver and net exports improving slowly but steadily," the report said. The EU report projected U.K. inflation at 2.6 percent in 2013 and falling to 2.1 percent in 2015. In 2014, the figure is seen at 2.3 percent. The Bank of England targets inflation at 2 percent. Inflation will slow due to continued weak pay growth in the very short term, the elimination of the fuel duty escalator in September 2014 and the recent appreciation of sterling which should dampen import prices, the report said. Growth can be achieved without overdue pressure on inflation in the short term, given the spare capacity in the economy, it added. Unemployment is expected to decline slowly from 7.8 percent this year to 7.3 percent in 2015. The country's fiscal deficit is expected to narrow over the forecast horizon to 4.4 percent in 2015-16. However, the debt ratio is seen rising over the entire period and reach 98.6 percent of GDP by 2015.