The economy is growing as a solid pace, and 2014 is off to a 'fantastic start', the British Chambers of Commerce (BCC) said Tuesday.

In its quarterly survey of nearly 8,000 businesses, the BCC found that all the critical fourth quarter balances were stronger than their long-term averages, and many were above their pre-recession levels.

As a result, the BCC has predicted that the UK's GDP will have grown 0.9% in the final three months of the year.

In manufacturing, the fourth quarter saw the key balances for domestic sales and export orders fall slightly compared to the previous quarter, although these balances still remained high by historical standards.

In services, the key balances also rose quarter-on-quarter, while export balances hit all-time highs.

Business confidence balances also climbed in the three month period, and were at a historically high level for manufacturing.

Employment expectations also improved, with 27% of employers planning to increase their workforce, while 31% of manufacturing companies are planning an increase.

BCC Chief Economist David Kern, said: "The upbeat results of our survey, with most fourth quarter key balances higher than their 2007 pre-recession levels and some at their all-time highs, suggest that the UK recovery will continue to strengthen further in the short term."

The BCC most recently predicted 0.8% quarterly GDP growth in the fourth quarter of 2013, after 0.8% in the third. However, following the survey it is considering upgrading its prediction to 0.9%, which it said may lead to higher full-year growth for both 2013 and 2014.

"However, the current level of growth, driven by buoyant housing and strong increases in household consumption, will weaken slightly in reaction to unduly high personal debt levels," Kern said.

Looking ahead, he believes GDP growth is likely to be slower in 2015 than in 2014.

"Strong export and investment balances in our survey confirm that business is ready to play a key role in rebalancing the economy, but the government and the MPC must create the necessary conditions for this to happen. While risks still persist both at home and abroad, the positive results of our fourth quarter survey will boost confidence as we enter 2014."

NR

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