British Chambers of Commerce report highest confidence since 2007

Mon Jul 1, 2013 7:01pm EDT

* BCC Q2 survey shows broad rise in sales and orders
    * BCC now sees 0.6 pct economic growth in Q2
    * Services export growth strongest since records 1989

    By David Milliken
    LONDON, July 2 (Reuters) - British business confidence is
the highest since 2007, bolstered by fast-rising exports, a
survey showed on Tuesday, in fresh evidence that Britain is
slowly recovering from the financial crisis.
    The British Chambers of Commerce's quarterly economic survey
- Britain's largest major business poll - also showed a strong
rise in firms' domestic and overseas sales over the past three
months, boding well for official data due later this month.
    Other surveys have shown a similar pattern. Markit's June
manufacturing purchasing managers' index on Monday was the
highest in more than two years, as was last week's GfK consumer
confidence barometer. 
    "The UK economy is slowly strengthening," said David Kern,
the BCC's chief economist. "If recent progress can be sustained,
there are realistic hopes that growth forecasts will be revised
up further," he added.
    Britain's recovery since the 2007-08 financial crisis has
been the slowest since modern records began, and weaker than in
any Group of Seven economy apart from Italy.
    At the end of May the BCC forecast the economy would grow
0.9 percent this year, but based in part on Tuesday's data, it
now expects growth of 0.6 percent in the second quarter alone.
    This compares to 0.3 percent growth in the first three
months of the year, and 0.5 percent forecast by the Bank of
England for the second quarter.
    This makes it even less likely that the Bank of England will
restart its programme of asset purchases on Thursday after its
monthly Monetary Policy Committee meeting, though questions
remain about new governor Mark Carney's longer-term intentions.
    The BCC survey showed that in the service sector, domestic
sales and orders were growing at the fastest pace since the
fourth quarter of 2007, while export sales had grown at the
fastest rate since the survey began in 1989.
    For manufacturers, domestic sales growth was the strongest
in two years and export order growth the best in a year.
    "The strength of the export balances, particularly in the
service sector, confirms the existence of huge untapped
potential that must be unleashed," Kern said.
    But although confidence about future sales and profitability
was the highest since 2007 for manufacturers and service sector
firms, Kern warned that growth could still be derailed.
    Financial turmoil emanating either from the euro zone or
from the U.S. Federal Reserve's efforts to reduce the amount of
monetary stimulus, as well as persistent inflation in Britain,
could all endanger confidence, he said.

 (Editing by Toby Chopra)
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