According to the British Chambers of Commerce (BCC), UK economic growth will accelerate faster than first thought in 2014, with key indicators for the economy now higher than before the start of the financial crisis.
The BCC’s latest quarterly survey of almost 8,000 firms indicates that the overall economy grew by around 0.9 per cent in the last quarter of 2013, compared with 0.8 per cent in Q3.
Domestic sales and orders among firms in the services sector grew at the fastest rate in more than nine years and export sales and orders were the highest since the BCC started keeping records in 1989.
In addition, five key manufacturing balances were also at all-time highs, allaying fears in the third quarter that the growth spurt in manufacturing was temporary.
Domestic orders rose by 35 per cent, turnover confidence was up 67 per cent and profitability confidence rose by over 50 per cent.
The survey also shows that employers were looking to increase hiring over the period, with a balance of 27 per cent of service firms and 31 per cent of manufacturers planning to increase headcount in the next three months.
Employment statistics are being closely monitored by the Bank of England, which pledged in August to keep interest rates at record lows until unemployment falls to at least 7 per cent. However, with the rate falling sharply to 7.4 percent in recent months, the Bank stressed that its 7 per cent threshold is not an automatic trigger for a rate hike.
Despite the positive results, the BCC still warns that the recovery must be maintained, as risks persist around access to finance for firms looking to expand to meet demand from growing customer orders.