The new quarterly survey released Tuesday by the British Chambers of Commerce (BCC) showed strong performance in British manufacturing and services sector but the organisation warned that risks still remain.

The six key balances are at all-time highs in the manufacturing sector and the services sector "continues to go from strength to strength," the BCC said in a press release.

"It's clear that the UK upturn is gathering momentum, with most key balances in this quarter higher than their pre-recession levels in 2007," said David Kern, Chief Economist at the BCC.

The BCC has raised its GDP growth forecast for Britain to 1.3 percent from the previous 0.9 percent in 2013, from 1.9 percent to 2.2 percent in 2014 and from 2.4 percent to 2.5 percent in 2015.

The growth forecast upgrading is made based on recent robust service sector and slightly faster expansion of household consumption, said the BCC.

But the organisation noted, "It is too early to declare that the recovery is now secure - especially given risks both at home and abroad that still remain."

"Growth will continue, but it is likely to slow slightly following this recent spurt. External shocks from the U.S. shutdown, possible debt default and tapering, and continued risks elsewhere in the world could all impact on our fragile recovery," said Kern.

"At home, the impact of reducing the deficit, fixing the banking system, and the relentless squeeze on living standards will inevitably act as a constraint on growth in the next few years," he said.

The quarterly survey, involving 7,400 companies, said that after a rise of 0.3 percent in the first quarter and 0.7 percent in the second quarter, Britain's GDP growth is forecast to slow slightly, with growth averaging 0.5 percent per quarter in the second half of 2013 and the first half of 2014.

The BCC expected a modest upturn in the pace of expansion, with the quarterly growth averaging 0.6 percent in the second half of 2014 and during 2015.

According to the BCC prediction, Britain's annual inflation would be 2.7 percent in 2013, 2.4 percent in 2014 and 2.3 percent in 2015.

For the main economic sectors, manufacturing output is forecast to decline by a further 0.8 percent in 2013, followed by modest positive growth of 1.1 percent in 2014 and 1.3 percent in 2015.

Total industrial output, after falling 2.4 percent in full-year terms in 2012, is forecast to decline by a further 0.9 percent in 2013, followed by weak positive growth of 0.8 percent in 2014, and 1.0 percent in 2015.

Construction was weak and volatile in recent years, with a full-year output expected to fall by a further 1.2 percent in 2013, followed by positive but relatively weak growth of 1.5 percent in 2014 and 1.1 percent in 2015.

Services will remain the main driver of the Britain's recovery in the next few years. Service Output is forecast to grow 1.9 percent in 2013, 2.6 percent in 2014, and 3.0 percent in 2015.

"It is vital to sustain the recovery and avoid setbacks," Kern stressed.

He called on the government to switch policy priorities towards measures to boost growth such as infrastructure investment, cutting business rates and taxes, promoting exports, and boosting the flow of lending to growing businesses through a fully-funded Business Bank. Endi

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