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The CBI had raised its growth forecast on the back of a pick-up in confidence across a range of sectors in the economy, including construction.

The employers鈥� organisation forecast growth of 1.2% in 2013, up from a forecast of 1.0% in May, after what it said was a better than expected second quarter and signs of a pick-up in confidence across a broad range of sectors, including services, construction and manufacturing.

In 2014, the CBI expects the economy to gather pace, forecasting 2.3% GDP growth - up from a 2.0% forecast in May - as disposable income increases and business and housing investment support domestic demand.

The revision comes after the CPAfor the construction industry on the back of strong improvement in the housing market.

John Cridland, CBI director-general, said: 鈥淭he economy has started to gain momentum and confidence is picking up, but it鈥檚 still early days.

鈥淲e need to see a full-blown rebalancing of our economy, with stronger business investment and trade before we can call a sustainable recovery. We hope that will begin to emerge next year, as the Eurozone starts growing again.

鈥淭he Government needs to get behind talented UK businesses to help them break into new export markets and sell great British products and services around the globe.鈥�

The CBI has raised its growth forecasts for 2013 and 2014 as the recovery begins to gather some short-term momentum. But the rebalancing away from consumption towards investment and trade is taking longer than expected.