The Bank of England increased its growth forecast for the UK next year from 2.7% to 2.9% and left its forecast for 2014 unchanged at 3.4%.
The Bank of England is to deliver a latest forecast for the UK economy today, with any improvement could signal that interest rates may increase earlier than expected.
Experts have pencilled in a hike in the cost of borrowing from its historic low of 0.5% for the spring of next year.
Surging house prices are unlikely to have any direct effect on interest rates for the time being as the Bank of England has said it would rather use other tools at its disposal to cool a potential property bubble before having to raise rates to do so.
The chief executive of Britain's largest house builder has urged the Bank of England not to restrict lending because it would hit "young people who are trying to get onto the housing ladder".
Mark Clare, chief executive of Barratt Developments, told ITV News he was concerned that limiting mortgage availability would force young people back into rented accommodation.
His comments came after interest rates were today kept at 0.5% despite growing calls for the Bank of England to act after housing prices jumped 9% in the last year.
The Bank of England kept interest rates on hold at 0.5% today.
The Bank left the scale of its quantitative easing (QE) programme to boost the money supply unchanged at £375 billion.
Conservative MP Andrew Tyrie, chair of the parliamentary commission on banking standards, has welcomed Andrew Bailey's plans to defer bankers' bonuses by up to seven years.
"There is always the risk in banking that people get rewarded for short-term, apparently good, decisions which turn out to have something rotten in them later on," he told ITV News.
"It's crucial that our regulator is really attentive to that and that's why we do need long deferral of remuneration."
Senior MP Andrew Tyrie responds to BoE warnings: "Bailey is clearly putting down a marker that he will be a tough regulator." watch ITV at 6
Conservative MP Andrew Tyrie is chairman of the Treasury Select Committee.
Deputy governor of the Bank of England Andrew Bailey told ITV News the point of having regulation on pay is to make bankers understand a bonus could be "taken back".
He said: "For me it's about...making bankers understand that their remuneration is not riskless, in the sense that, once it's deferred, it can be taken back."
Deputy governor of the Bank of England Andrew Bailey told ITV News that bankers' bonuses should probably be delayed between five and seven years instead of the three-year deferral currently in place.
The Parliamentary Commission on Banking Standards previously suggested up to a 10-year bonus delay but Mr Bailey told Economics Editor Richard Edgar that retirement had to be taken into account.
He said: "You've got to balance that against, what might be a rather common sense argument, about what is the expected length of people's working lives.
"I'm not in the business of deferring for a long time into retirement."