Britain is set to join an elite band of economies in which the Internet is producing tangible financial rewards, in-depth research shows.

Internet penetration in Britain is currently 15 per cent of the population, compared to 40 per cent in the US and Canada and around 30 per cent in Scandanavia and Australia.

But a study by the international investment group, Schroders, shows that Britain is catching up fast, thanks to the abundance of free Internet Service providers (ISPs).

The study predicts that, over the next year, usage will reach “critical mass” – the point at which there are enough customers to make e-commerce a viable option for companies.

Britain will also close the gap on the US faster than other leading economies, such as Germany, France and Japan, the study claims.

Internet experts predict that the surge in e-commerce in Britain will see the price of household goods plummet by 15 per cent over the next three years.