LONDON Jan 7 British businesses reported strong
growth and rising confidence in the fourth quarter of 2013,
suggesting the country's economic recovery will pick up speed,
a survey showed on Tuesday.
The British Chambers of Commerce (BCC) said its quarterly
economic survey indicated the overall economy grew by around 0.9
percent in the October-December period, faster than 0.8 percent
in the third quarter.
Domestic sales and orders among firms in the dominant
services sector jumped at the fastest rate in more than nine
years and their export sales and orders were the highest since
1989 when the survey began.
Although manufacturers' domestic sales and export orders
readings dipped slightly, they reported the joint highest level
of confidence since 1989 that their profitability would rise in
the year ahead and investment intentions grew.
"With most key balances in this quarter higher than their
pre-recession levels in 2007, it is clear that the UK recovery
is likely to continue to strengthen in the short term," said
David Kern, chief economist at the BCC.
The BCC survey - Britain's largest private-sector business
poll - also showed British employers were looking to ramp up
hiring, with a balance of 27 percent of service firms and 31
percent of manufacturers planning to increase headcount in the
next three months.
Employment statistics are being closed monitored by the Bank
of England which pledged in August to keep interest rates at
record lows at least until unemployment falls to 7 percent.
With unemployment falling sharply to 7.4 percent in recent
months, the Bank has been quick to stress that its 7 percent
threshold is not an automatic trigger for a rate hike.
The BCC warned on Tuesday that headwinds to the recovery
remain. "The euro zone's basic problems have not yet been
resolved, which could adversely impact our exporters, and
inflation remains a major concern," Kern said.
In a sign of potential inflationary pressures, a growing
number of firms told the BCC they were looking to raise prices,
with manufacturers citing higher raw material costs and services
companies greater financial costs and overheads.
The BCC surveyed almost 6,000 service firms and more than
2,000 manufacturers between Nov. 11 and Dec. 2 for its poll.