THE Confederation of British Industry has lifted its forecast for economic growth for this year from one per cent to 1.2 per cent amid signs of a pick-up in business confidence.
Optimism about performance across the services, construction and manufacturing sectors has added to hopes that the recovery is gathering pace after 0.6 per cent growth in the second quarter.
The CBI, which represents 240,000 UK businesses, has also increased its forecast growth for 2014, from two per cent to 2.3 per cent, predicting that increasing disposable income and business and housing investment will boost demand.
However, the body warns that a hoped-for rebalancing of the economy to become less reliant on consumer spending and more focused on investment and trade is taking longer than expected.
Its upgrade comes after figures last week showed that key trading partner the Eurozone had emerged from recession.