Its figures suggest that gross domestic product (GDP) grew by 0.7% in the January-March period, slightly up from 0.6% in the last quarter of 2014.

But there was a sharp drop in manufacturing export orders and the CBI warned that the strong pound was weighing on already muted foreign trade performance.

Firms were hopeful of a better second quarter though expectations were much lower than they were a year ago, the survey found.

The poll of 764 businesses showed a positive balance of 18% – between firms reporting performance up compared with those saying it was down – in the three months to March.

It was little changed from 19% in February.

Distribution businesses – which include retail, wholesale and motor traders – strengthened as did consumer services – such as hotels, bars, and restaurants – as well as travel and leisure firms.

But there was weaker growth in manufacturing as well as business and professional services – including accountancy, legal and marketing firms – which felt the strain of tougher competition.

Manufacturing and services expected to see a pick-up ahead, with the overall balance of expectations for growth over the next three months at a positive 25%.

But this was a “significant scaling back” of sentiment compared to this time last year, the CBI said.