Economy 'growing at fastest pace for more than a decade', says CBI report

Report comes as British Chambers of Commerce (BCC) upgrades its growth forecast for this year from 2.8% to 3.1%

Summer shoppers
The UK's economy is growing at the fastest rate for a decade, according to the CBI

Britain’s economy is growing at its fastest pace for more than a decade while consumers are increasingly confident about prospects, according to a raft of bullish reports today.

The CBI says the UK is surging ahead at its strongest rate since at least 2003, while the British Chambers of Commerce (BCC) has upgraded its growth forecast for this year from 2.8% to 3.1%.

And research company GfK said its consumer confidence index had climbed out of negative territory for the first time in nine years.

The figures will provide a boost for Chancellor George Osborne and were welcomed by the Treasury.

The CBI said a survey of growth recorded in May gave the strongest reading since its data began in 2003.

The poll of 726 firms found a balance of plus 35% - the difference between those reporting higher output in the last three months and those saying it was lower. It was up from plus 25% in April.

It suggested the UK economy - which grew by 0.8% in the first three months of 2014 - had continued to perform strongly going into the second quarter, the CBI said.

The pace of growth was expected to remain above average, with a balance of plus 30% predicting that output will increase over the next three months.

CBI deputy director-general Katja Hall said: “The UK economy is performing strongly thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.

“What’s encouraging is that growth is becoming more broad-based, with solid increases in business investment over the past year. This bodes well for the year ahead.”

But she said global developments including tensions over Ukraine and the eurozone crisis posed risks to the UK outlook.

Meanwhile the BCC upgraded forecasts for this year as well as for 2015, when it now expects growth of 2.7%, up from 2.5%. It continues to expect 2.5% growth in 2016.

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer