The National Institute of Economic and Social Research said the British economy has been stagnating since the middle of 2010.
NIESR said that it expected growth of 2.1 percent in 2015, but growth returning to pre-recession levels would not occur until 2018, The Daily Telegraph reported Thursday.
"We can't even begin to talk about recovery yet. That comes in 2015," said NIESR economist Simon Kirby.
Inflation and slow wage growth will hamper consumer spending, which will begin to recover in 2014 and 2015, the think tank said. Until then, purchasing power will shrink. In addition, demand from European trading particular remains slow, NIESR said.
The think tank suggested government spending on infrastructure to give the economy a boost.
Spending on "housing, roads, schools and so on," would help, said NIESR Director Jonathan Portes.
With interest rates low, "You can now finance that for effectively nothing," he said.