The British Chambers of Commerce (BCC) announced that it expects UK GDP growth of 3.2 per cent in 2014, the highest growth rate since 2007, up from 3.1 per cent.
Its growth forecast for next year has been upgraded from 2.7 per cent to 2.8 per cent, although its forecast for 2016 remains unchanged at 2.5 per cent and points to a slowdown.
The BCC said it had upgraded its growth forecast for this year on the back of stronger employment figures and higher expected growth in the third and fourth quarters of 2014 than previously estimated in May.
The organisation, which represents companies across the UK, has predicted that the first interest rate rise in the UK, to 0.75 per cent, will come in the first quarter of 2015.
John Longworth, director general of the BCC, urged that “stellar growth” this year is not a “flash in the pan”.
He said: “It is disappointing that we have downgraded export growth for the next two years as a strong international trade performance is key if we are to steer away from a reliance on consumer spending.
“While business investment is forecast to grow strongly over the next three years, it will be growing from a low base.”
Mr Longworth added: “To sustain investment momentum into the future, the government and the Bank of England need to give businesses the confidence they need to invest by keeping official interest rates low for as long as possible. Any future rate rises must be gradual and modest.”
