London - British business confidence is the highest since 2007, bolstered by fast-rising exports, a survey showed on Tuesday, in fresh evidence that Britain is slowly recovering from the financial crisis.
The British Chambers of Commerce's quarterly economic survey - Britain's largest major business poll - also showed a strong rise in firms' domestic and overseas sales over the past three months, boding well for official data due later this month.
Other surveys have shown a similar pattern. Markit's June manufacturing purchasing managers' index on Monday was the highest in more than two years, as was last week's GfK consumer confidence barometer.
“The UK economy is slowly strengthening,” said David Kern, the BCC's chief economist.
“If recent progress can be sustained, there are realistic hopes that growth forecasts will be revised up further,” he added.
Britain's recovery since the 2007-08 financial crisis has been the slowest since modern records began, and weaker than in any Group of Seven economy apart from Italy.
At the end of May the BCC forecast the economy would grow 0.9 percent this year, but based in part on Tuesday's data, it now expects growth of 0.6 percent in the second quarter alone.
This compares to 0.3 percent growth in the first three months of the year, and 0.5 percent forecast by the Bank of England for the second quarter.
This makes it even less likely that the Bank of England will restart its programme of asset purchases on Thursday after its monthly Monetary Policy Committee meeting, though questions remain about new governor Mark Carney's longer-term intentions.
The BCC survey showed that in the service sector, domestic sales and orders were growing at the fastest pace since the fourth quarter of 2007, while export sales had grown at the fastest rate since the survey began in 1989.
For manufacturers, domestic sales growth was the strongest in two years and export order growth the best in a year.
“The strength of the export balances, particularly in the service sector, confirms the existence of huge untapped potential that must be unleashed,” Kern said.
But although confidence about future sales and profitability was the highest since 2007 for manufacturers and service sector firms, Kern warned that growth could still be derailed.
Financial turmoil emanating either from the euro zone or from the US Federal Reserve's efforts to reduce the amount of monetary stimulus, as well as persistent inflation in Britain, could all endanger confidence, he said. - Reuters