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British businesses are more confident about the future than they have been since 1995, according to the latest Lloyds TSB corporate markets survey.

During the last year the high street bank questioned 2,500 companies, finding that 37 per cent more firms expressed a positive than a negative outlook. This represents a dramatic increase on the positive 19 per cent balance seen in December 2005.

Behind the surge in confidence is a boom in sales, with businesses benefiting from improved market conditions after a period of efficiency drives in leaner times.

As a result the number of companies enjoying boosted sales figures has reached 55 per cent, up from 41 per cent last year.

"UK firms weathered the difficult trading environment of the last two years by cutting production costs and increasing their efficiency," Diana Brightmore-Armour of Lloyds TSB said.

"This has put them in a great position to exploit the improved market conditions. By raising their prices companies have taken full advantage of stronger UK and global growth last year and we think 2007 will be another good one for UK company profits."

The success of British companies reflects the booming GDP growth enjoyed in the final quarter of 2006. According to the National Institute of Economic and Social Research (NIESR), this rose to 0.7 per cent in the three months to December.