Firms thrive as revival speeds up

BRITAIN'S economic recovery is hotting up, according to a survey showing business for both manufacturing and service industry firms has surged over the past three months.

The latest quarterly poll of more than 7000 firms by the British Chambers of Commerce found that sales and orders from both the domestic and overseas markets have risen to levels not seen for a year.

And confirming that firms expect the good times to keep rolling, confidence about future turnover and profitability has soared to its highest for two years.

Manufacturing investment is continuing to contract but service sector investment has staged a strong revival. Service firms are recruiting more staff than industry is firing.

David Lennan, the BCC's director general, said: 'Large manufacturers have taken a significant stride towards recovery and with confidence high we would hope small firms would soon follow suit.' He said that with inflation pressures so low there was no need for the Bank of England to rush into raising interest rates.

Latest news on the housing market showed property prices continued to surge during the first quarter, boosted by a shortage of houses for sale. A net balance of 57% of surveyors reported rising prices, compared with 49% the previous month, according to the Royal Institution of Chartered Surveyors.