Growth in the private sector, including manufacturing, retail and services, picked up in the past few months, a new study shows.
A survey of more than 650 firms by the CBI found that growth was above the long-term average in most sectors.
Higher inflation and weak pay growth will squeeze household budgets, it was predicted.
Rain Newton-Smith, the CBI’s chief economist, said: “It’s good to see firm growth in the UK economy this month and expectations of growth into next quarter also look positive.
“However, both businesses and consumers continue to grapple with uncertainty over the economic outlook and Brexit, so the Government must help counter this by intensifying its focus on the domestic agenda, with industrial strategy leading the way to deliver higher productivity and living standards.”