The UK economy is in good health according to two major business lobby groups, the CBI and the British Chambers of Commerce (BCC). The CBI says growth reached a record high in May, marking the best reading since it began gathering data in 2003, reports BBC.
Meanwhile, the BCC upgraded its growth forecast for 2014 from 2.8% to 3.1%, which, if achieved, would be the highest rate since pre-crisis 2007.
That figure is well above the 2.7% forecast by the OBR.
The OBR, or Office for Budget Responsibility, is the government’s independent fiscal watchdog.
Latest official figures showed that the UK economy grew by 0.8% in the first three months of 2014.
The CBI’s growth report suggests the UK economy has continued to perform strongly in the second quarter of this year.
Stronger economic performance was seen across the board, it said.
Sectors including retail sales and professional and consumer services did well in the three months to May, while manufacturing output continued to grow at a “solid pace”.
Andrew Graham, the chief executive of wallpaper manufacturer Graham & Brown, told the BBC he was cautiously confident: “The economy is improving, but that is from a very low base.
“I think we are just starting to see recovery. As a business, we have starting investing seriously again over the last 12 months.”
UK still ‘exposed’
CBI deputy director-general Katja Hall said the improvement was down to increased confidence in the UK economy, easier access to credit, and better global economic conditions.
However, Ms Hall said there were risks to the UK’s outlook from global developments, including the “possibility that the situation in Ukraine and Russia could impact on global commodity prices”.
She added: “With the eurozone crisis still far from being fully resolved, the UK continues to be exposed to a prolonged period of subdued activity in the region.”
The BCC also said the economic recovery was not guaranteed.
John Longworth, the BCC’s director general, said: “Our forecast confirms that Britain is leading, rather than following, other major economies when it comes to short-term growth, which is great news.
“But make no mistake – we still have a lot of work to do.”
He added that the UK was “overly reliant on consumer spending” as a driver of growth.