Research by a leading business group shows the UK economy grew in the fourth quarter of 2012, despite widespread fears of a triple dip recession.

The British Chamber of Commerce (BCC) Quarterly Economic Survey showed a pick up in both the manufacturing and service sectors in the last three months of the year.

The survey of 7,662 businesses also found that levels of confidence and investment had increased over the period, despite remaining weak by historical standards.

David Kern, the BCC's Chief Economist, said the marked increase in confidence in both sectors reinforced the group's view that the economy would record modest positive growth in the fourth quarter of 2012.

"Fears that the economy returned to negative growth in the fourth quarter are not supported by our survey," he said.

The Bank of England holds a different view, having already predicted figures will show the economy shrank in the final quarter, following the boost from the Olympics during the previous three months.

Recent surveys from Markit showed weak performances from both the service and construction sectors towards the end of the year, increasing fears of a contraction.

The BCC's survey showed service export balances were higher than their average pre-recession levels in 2007, with deliveries at +24% and orders at +18%.

Balance figures are calculated by subtracting the percentage of companies reporting falls in each area from the percentage of companies reporting increases.

Manufacturing export balances were still weak, with deliveries at +13% and orders at +11%.

Manufacturing investment in plant and machinery increased by four points to +11% and rose six points to +20% in training.

Service investment rose by two points to +5% in plant and machinery, and by four points to +14% in training.

Cashflow balances, though higher, are weak overall, and the service sector remained negative at -1%.

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