UK companies saw a rise in sales and optimism in the third quarter, boosted by factories which are enjoying a “growth spurt” according to the British Chambers of Commerce, leading the business group to predict a rise in GDP forecasts for the second time in four months.

David Kern, chief economist at the BCC, said that the country’s recovery was clearly “gaining momentum”, with improvements in the manufacturing and services sectors.

The BCC’s survey of 7,400 businesses found a rise in jobs, employment expectations and cashflow whilst confidence in turnover was at a record high. Employment growth in the services sector was also at its best level since 2007. Meanwhile, confidence in turnover and profitability in both manufacturing and services was at pre-recession levels in the three months to September.

However, the BCC added that factors such as the US shutdown and possible default as well as the continued squeeze on living standards at home could still impact the fragile recovery.