Image caption Export sales have boosted the UK's economic prospects, the BCC says

Business confidence in the UK is at its highest level since 2007, the latest economic survey from a leading business group has suggested.

The quarterly survey from the British Chambers of Commerce (BCC) is the latest indication that the UK's economic recovery is strengthening.

There was further good news from a survey of the UK's construction sector.

The Markit/CIPS purchasing managers' index indicated the sector grew for the second month in a row in June.

Encouraging trend

"The UK upturn is slowly strengthening," said David Kern, the BCC's chief economist.

The BCC said export sales had grown by their fastest rate since it began publishing its survey in 1989.

Analysis Two swallows don't make a summer and two positive economic indicators don't guarantee a sustainable recovery. But the upbeat noises from the British Chambers of Commerce and construction purchasing managers today (and manufacturing yesterday) reinforce the assumption amongst many economists that growth picked up in the second quarter of this year. It adds up to a brighter background to Mark Carney's first Monetary Policy Committee meeting at the Bank of England. On Thursday he will have to cast his first vote alongside colleagues who have voted against a further loosening of policy in recent months. There is little in recent data which might persuade the six out of nine on the committee who have voted against more money creation (quantitative easing) to change their minds. So Mr Carney will have to decide whether to go along with them or start off his tenure in a minority favouring more quantitative easing, as his predecessor Sir Mervyn King was.

It now expects GDP to grow by 0.6% in the second quarter of 2013.

That is significantly more positive than its previous forecast, where it predicted growth of 0.9% for the whole year.

The survey adds to a slew of recent positive data suggesting the UK economy is beginning to strengthen after a long and slow recovery from the global financial crisis.

On Monday, PMI data also suggested UK manufacturing is growing at its fastest rate in two years, while Bank of England figures showed that mortgage approvals hit a three-and-a-half-year high in May.

Last week, official data showed the services sector, which accounts for about three-quarters of the economy, was continuing to grow.

Exports crucial

Mr Kern said the services sector in particular was benefitting from rising exports.

"The remarkable export balances show that the service sector is capable of increasing its trade surplus over time and can work to reduce our overall trade deficit," he said.

"Developing the export potential of this sector is critical to long-term prosperity."

The BCC said the number of businesses looking to export had increased in the face of a flat domestic market, and exporters were increasingly looking to the rest of the world outside Europe.

However, there are still concerns that the recovery could yet be derailed.

Media playback is unsupported on your device Media caption John Longworth, BCC, warns the UK's economic recovery is "not in the bag yet"

Speaking on BBC Radio 4's Today programme, BCC director general John Longworth said there had been "false dawns" of recovery before, where business expansion had been choked off by banks being unwilling to lend the money required.

He also said inflation remained a worry among businesses.

But UK businessman Luke Johnson, the former chairman of Pizza Express, told the BBC he believed there was a "real recovery" under way.

"I think the consistency of all the surveys and statistics coming through over the last six to 12 months is pretty compelling," he said.

"I sense a rising tide of animal spirits. Of course there are always threats and challenges ahead [but] sentiment is now much better, and this is now a real recovery."