Following a survey of 5,600 companies, the report from the BCC shows progress in both the manufacturing and service sectors and business confidence is improving.
The report also shows employment expectations in both sectors saw gains this quarter, but the BCC continues to predict unemployment will reach 3.2 million - 10% of the workforce - by mid 2010.
BCC director-general David Frost said: "These results are sending Gordon Brown and Alistair Darling a strong message from the business community. It is absolutely vital that the improvement in business confidence is nurtured.
"Our economy is based on confidence, and wealth-creating businesses need to know they will be given the freedom and flexibility to drive the UK out of recession and into a sustainable recovery.
"The Government needs to think long and hard about its policies on taxation and red tape, which threaten to stifle growth and employment. The planned increase in National Insurance contributions is nothing more than a tax on jobs and it should be abandoned immediately.
"Signs of improvement in the economy cannot be an excuse for the Government to start increasing business tax as a remedy for the ill health of the nation's finances. Risking any fragile gains would be a huge mistake."
The worst of the recession is over says British Chambers of Commerce
The worst of the recession is over, according to the British Chambers of Commerce (BCC).
