The UK economy is growing at the greatest pace in more than a decade, with growth forecasts at their highest level in seven years.
Data from the Confederation of British Industry shows service, manufacturing and retail businesses posted record monthly growth in activity in May.
It shows a balance of 35 per cent of businesses estimated their output had increased on the previous month, up from 25 per cent in April.
A further 30 per cent of those surveyed expect growth to continue for the next three months.
Retailers and service companies’ growth assumptions are strengthening, while manufacturers’ estimated pace of grow remains steady on the past two months.
CBI deputy director-general Katja Hall says the recovery’s broad base is heartening, as is “solid” business investment in the past year.
She says: “This bodes well for the year ahead.
“The UK economy is performing strongly and this is thanks to rising business and consumer confidence, better credit conditions at home and improving global economic conditions.”
Despite the bullish outlook, she cautions of external shocks derailing the UK’s momentum, such as the situation between Ukraine and Russia .
Separately, the British Chambers of Commerce has bumped up its expectation of this year’s growth rate to 3.1 per cent from 2.8 per cent, the highest forecasted growth rate since 2007.
The 2015 forecast has been revised to 2.7 per cent, up 2 percentage points, while the 2016 estimate remains unchanged at 2.5 per cent.
It has also brought forward its forecast of a rise in interest rates, with the first 25 basis point hike expected in the first quarter of next year. Previously, the BCC thought it would be in the third quarter.