Business confidence has jumped to an 18-month high, but companies are having trouble recruiting skilled workers, according to a survey.
The Lloyds Bank Business in Britain report’s confidence index rose to 24% – double the level immediately following the EU referendum last year.
The index is a measure of expected sales, orders and profits.
A separate survey by the British Chambers of Commerce forecast weak economic growth for the next few years.
The Lloyds Bank report surveyed the views of 1,500 UK companies in May, after the general election was called.
The average for the confidence index in the 25 years the report has been compiled is 23%.
The net balance of companies that said they had found it difficult to find skilled labour in the past six months hit a 10-year high of 52%.
That was up from 31% in January when the last report was released.
The share of firms facing similar issues with unskilled workers also rose to 26%, up from 14%.
Tim Hinton of Lloyds Banking Group said: “Although challenges remain in recruiting both skilled and unskilled labour, businesses are anticipating higher sales, increased profits and staffing levels to rise.
“However, the outlook remains mixed at best.”
According to the survey, four out of six business sectors reported higher levels of confidence since January.
That was attributed mainly to increased demand from UK customers, which Lloyds said suggested was due to factors other than the help that weaker sterling had given to exporters.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Although the pound’s value is seen as nearer ‘fair value’, currency volatility remains a big concern for some UK businesses that trade internationally.”
Meanwhile, the British Chambers of Commerce (BCC) says that economic growth will remain anaemic over the next few years.
The business group, which represents thousands of small and medium-sized companies, says annual GDP growth will not exceed 1.5% by 2020 and inflation could end up being higher than expected.
The BCC expects inflation to average 2.9% this year and peak at 3.4% in the last three months of 2017, which it says will hit consumer spending.
The group raised its forecast for economic growth from 1.4% to 1.5% for this year, but expected GDP to increase by just 1.3% next year.
Adam Marshall, director-general of the BCC, said: “Over recent months, many of the businesses I speak to have expressed cautious optimism for their own prospects, but remain wary about the growth prospects of the UK economy as a whole.
“In the wake of an inconclusive general election, that wariness is set to increase.”
The group has urged the government to spend more on infrastructure, particularly broadband and mobile phone connectivity, while it has described the UK’s road network as sclerotic.
In May the Office for National Statistics said the economy expanded by 0.2% in the first three months of the year, down from its first estimate of 0.3%, as the key services sector lost momentum.