Economic growth continued to gather pace in April, alongside predictions of even stronger growth in the next quarter, according to the latest Confederation of British Industry (CBI) Growth Indicator.

Output rose from the eight-month low recorded in the previous month, and remains well above average, indicating that the UK’s economic recovery is steadily advancing.

Retail sales grew 4.2% in March compared to March 2013. Figures also increased in the first quarter of 2014 compared with the first quarter of 2013, by 3.8%. This continues a pattern of year-on-year growth since early 2013.

88% of motor traders reported sales volumes to be up on last year and just 9% said they were down giving a balance of +79%, which was 33% significantly above expectations.

The CBI said the outlook for the next three months is exceptionally strong and broad-based, with growth expectations the strongest since the data began in 2003.

The survey of 675 respondents across manufacturing, retail and services recorded solid growth in activity, with a balance of a 25% increase, up from an increase of 19% in March.

Businesses are optimistic that growth will pick up again over the next quarter, with the expectations balance at a record 42%.

Katja Hall, CBI chief policy director, said: “These latest growth figures, and the strong expectations for the next quarter, provide further encouraging signs of increasing vigour and confidence across the UK economy.

“While consumer spending accounted for the lion’s share of GDP growth last year, there are firm indications of growth becoming more broad-based. It’s good to see that business investment has consistently contributed to quarterly growth since 2013.

“We expect growth to strengthen in 2014, underpinned partly by rising business and consumer confidence and supportive monetary conditions. Productivity and earnings are also expected to start recovering this year.”

Sue Robinson, director of National Franchised Dealers Association (NFDA), said: "This growth in sales is reflected in the increase in new car sales in recent months with dealers reporting increased footfall in showrooms.

“While new products and services offered by dealers and manufacturers during 2014 have in no doubt influenced many consumers to buy, the return of consumer confidence fuelled by the upturn in the economy is certainly a major factor."