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Reports show economy on the up
4:20pm Friday 30th May 2014 in Business
THE UK's economy is growing at its fastest pace for more than a decade with consumers increasingly confident about prospects, reports have said.
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 per cent to 3.1 per cent.
Research company GfK added its consumer confidence index had climbed out of negative territory for the first time in nine years.
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 per cent, the difference between those reporting higher output in the last three months and those saying it was lower.
It was up from plus 25 per cent in April.
It suggested the UK economy, which grew by 0.8 per cent in the first three months of 2014, had continued to perform strongly going into the second quarter.
The pace of growth was expected to remain above average, with a balance of plus 30 per cent predicting output will increase over the next three months.
Katja Hall, CBI deputy director-general, 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."
However, she said global developments, including tensions over Ukraine and the Eurozone crisis, posed risks to the UK outlook.
The BCC upgraded forecasts for this year as well as for 2015, when it now expects growth of 2.7 per cent, up from 2.5 per cent.
It continues to expect 2.5 per cent growth in 2016.
Director general John Longworth said: "Businesses up and down the country should be congratulated for their hard work and determination in the face of many challenges over recent years.
"But make no mistake, we still have a lot of work to do.
"The task at hand is to ensure that 2014 is not as good as it gets for the UK economy.
"Everything possible must be done to avoid slower growth in future.
"We need to invest, innovate, export and build."
The GfK survey showed consumer confidence had increased by three points this month to reach zero, the first time it has been out of negative territory since April 2005.
A rise of 27 points since April 2013 has been the steepest for more than 36 years, since a climb of 34 points over a seven-month period to December 1977.
Nick Moon, GfK managing director, added: ""The real driver of the increase is people's assessment of the general economic climate."
A separate survey data from Markit showed households' financial concerns for the coming year were topped by fears over a rising cost of living, energy bills and interest rates.
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