British business has reported its best quarter for three years, according to a British Chambers of Commerce survey.

Government Response: HM Treasury

A spokesperson for HM Treasury said: "This is further evidence that growth is strengthening and becoming more balanced, with manufacturing output rising. 

"It demonstrates that our hard-won stability and strong fundamentals continue to provide the right conditions for all British businesses to grow, invest and create wealth."

Forum Response: Institute of Directors

Graeme Leach, chief economist at the Institute of Directors, said: "Stronger UK and global GDP growth this year will fuel rising demand for manufactured goods.

"UK manufacturing output should grow two per cent this year. On balance we expect the positive impact of US GDP growth will outweigh the negative effect of sterling appreciation against the dollar, on the demand for UK exports."

Forum Response: British Retail Consortium

A spokesperson for the BRC said: "Retailers are not experiencing the same improvement that the BCC survey shows for manufacturing.  Although the BRC/KPMG Retail Sales Monitor shows sales have picked up a little this year after a poor end to 2003, the upturn is artificially boosted by the comparison with the weak start to 2003, when trade was hit by the Iraq war.

"This year, sales have been steady rather than spectacular, and although February was a reasonable month for the retail sector, in many areas price deflation has driven sales in unit terms but sales have weakened in value terms. 

"There is no sign of the sluggish trend ending: consumer sentiment is fragile, and with pressure on margins still a concern, retailers are nervous about the impact of further increases in interest rates."