The British Chambers of Commerce's (BCC) quarterly economic survey -- the largest of its kind in Britain -- also showed manufacturing and services companies were in fairly confident mood about their prospects for 2015.
Four months before a national election, the BCC report will make welcome reading for Britain's governing Conservatives, following a string of surveys and data that suggested Britain's economic recovery slowed towards the end of last year.
The net balance of manufacturers and service sector firms that expanded their workforce in the last quarter rose to the highest level since records began in 1989, the BCC said.
But it said "political point-scoring" could yet derail the strong business confidence, adding that Bank of England interest rates should remain at their record low of 0.5 percent.
"If current and future governments do the right things, there is no reason why the UK should not enjoy sustainable growth," said John Longworth, director general of the BCC.
"With no signs of inflation and no upward pressure on wages, there is no justification for an early rise in interest rates."
Consumer price inflation fell to a 12-year low of 1.0 percent in November, and only two out of the BoE's nine rate setters have voted to raise interest rates from 0.5 percent since August. Financial markets currently price in a first BoE rate hike early next year.
The BoE has said it is unlikely to raise interest rates before there are signs that wages are starting to rise faster, and the BCC survey offered some indications this might be in the pipeline.
The share of services companies that said they were under pressure to raise prices because of pay settlements rose from 23 percent to 28 percent in the fourth quarter - the biggest proportion since the start of 2008.
Overall, the BCC said the results supported its view that British economic growth for 2015 will stabilise at a level well above 2 percent.
There was less upbeat news from the construction sector.
A separate survey from the Royal Institution of Chartered Surveyors showed workloads for construction companies grew at a slower pace in the fourth quarter, although private commercial construction firms continued to fare well.
While confidence about growth prospects remained firm, RICS reported anecdotal evidence of greater uncertainty due to the May 7 national election, as well as severe labour shortages.
"Now that workloads are rising and optimism is growing, the practical challenges are in providing the skilled labour the industry needs and in alleviating the financial constraints, which saw nine months of decreased lending in 2014," said Alan Muse, RICS director for the built environment.
The BCC survey was conducted between Nov. 10 and Dec. 3, and based on responses from 6,904 firms.
(Reporting by Andy Bruce; editing by John Stonestreet)
