Britain's economic prospects are the brightest they have been in more than a decade and optimism among consumers has surged to its best level in nine years, according to separate reports published on Friday.
Business lobby group the CBI said its May survey of manufacturers, retailers and firms across the service sector showed the economy growing at its fastest pace since its records began in 2003.
"The UK economy is performing strongly thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions," said Katja Hall, the CBI's deputy director-general.
"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."
The rosy outlook painted by the UK business community coincided with a surge in optimism among consumers, as the resounding message about the positive economic backdrop fed through to British households.
GfK's consumer confidence index rose three points in May to 0 - it is rare for it to consistently register a positive figure and May's reading was the first time out of negative territory since 2005.
The British Chambers of Commerce (BCC) has now raised its forecast for economic growth this year to 3.1%, from its earlier prediction of 2.8%, as Britain leads other economies in short-term growth. If the forecast proves correct, it would be the strongest rate of growth since 2007.
But the BCC dampened some of the feelgood factor with a warning that 2014 could mark the high point for the economy as households come under renewed financial strain next year once interest rates start to rise.
George Osborne will be hoping to fight the general election on the basis that he is the only safe pair of hands to steer the economy in the years ahead.
A spokesman for the Treasury said: "Today's reports from the British Chamber of Commerce, Confederation of British Industry, and GfK provide further evidence that the government's long term economic plan is working, delivering economic security for hardworking people.
Coming alongside last week's strong growth and investment numbers, today's figures show that the foundations for a broad based recovery are in now place.
But we cannot take the recovery for granted and the biggest risk now to economic security would be abandoning the plan that's laying the foundations for a brighter economic future."
John Longworth, director general of the BCC, said: "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 urge the Bank of England to keep official interest rates low for as long as possible, and ensure that future rate rises are gradual and modest.
"We have made far too much progress in recent years to simply accept that growth rates are permanently lower than they were before the financial crisis."
The BCC now expects rates to rise from their historic low of 0.5% in the first three months of 2015, around six months earlier than previously expected.
It said the additional burden on indebted households with mortgages would weigh on consumer spending next year and in 2016, holding back growth.
The group expects growth to slow to 2.7% in 2015, and further to 2.5% in 2016. Charlie Bean, a Bank of England deputy governor, said the rate-setting Monetary Policy Committee would move gradually to increase the cost of borrowing.
He told the Western Mail: "There is an argument for trying to move cautiously in baby steps, if you take large steps there is a greater likelihood of getting it wrong.
"So the committee has been clear in the guidance we issued back in February that when the bank rate does rise, and we don't think there is a case for an immediate rise, we expect it to do so gradually and to a level in the medium term which is likely to be materially below its pre-crisis average of around 5%."
theguardian.com
Business lobby group the CBI said its May survey of manufacturers, retailers and firms across the service sector showed the economy growing at its fastest pace since its records began in 2003.
"The UK economy is performing strongly thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions," said Katja Hall, the CBI's deputy director-general.
"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."
The rosy outlook painted by the UK business community coincided with a surge in optimism among consumers, as the resounding message about the positive economic backdrop fed through to British households.
GfK's consumer confidence index rose three points in May to 0 - it is rare for it to consistently register a positive figure and May's reading was the first time out of negative territory since 2005.
The British Chambers of Commerce (BCC) has now raised its forecast for economic growth this year to 3.1%, from its earlier prediction of 2.8%, as Britain leads other economies in short-term growth. If the forecast proves correct, it would be the strongest rate of growth since 2007.
But the BCC dampened some of the feelgood factor with a warning that 2014 could mark the high point for the economy as households come under renewed financial strain next year once interest rates start to rise.
George Osborne will be hoping to fight the general election on the basis that he is the only safe pair of hands to steer the economy in the years ahead.
A spokesman for the Treasury said: "Today's reports from the British Chamber of Commerce, Confederation of British Industry, and GfK provide further evidence that the government's long term economic plan is working, delivering economic security for hardworking people.
Coming alongside last week's strong growth and investment numbers, today's figures show that the foundations for a broad based recovery are in now place.
But we cannot take the recovery for granted and the biggest risk now to economic security would be abandoning the plan that's laying the foundations for a brighter economic future."
John Longworth, director general of the BCC, said: "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 urge the Bank of England to keep official interest rates low for as long as possible, and ensure that future rate rises are gradual and modest.
"We have made far too much progress in recent years to simply accept that growth rates are permanently lower than they were before the financial crisis."
The BCC now expects rates to rise from their historic low of 0.5% in the first three months of 2015, around six months earlier than previously expected.
It said the additional burden on indebted households with mortgages would weigh on consumer spending next year and in 2016, holding back growth.
The group expects growth to slow to 2.7% in 2015, and further to 2.5% in 2016. Charlie Bean, a Bank of England deputy governor, said the rate-setting Monetary Policy Committee would move gradually to increase the cost of borrowing.
He told the Western Mail: "There is an argument for trying to move cautiously in baby steps, if you take large steps there is a greater likelihood of getting it wrong.
"So the committee has been clear in the guidance we issued back in February that when the bank rate does rise, and we don't think there is a case for an immediate rise, we expect it to do so gradually and to a level in the medium term which is likely to be materially below its pre-crisis average of around 5%."
theguardian.com
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