The Bank of England's Monetary Policy Committee (MPC) has increased its UK economic growth forecast for the first quarter of the year, from 0.9% to 1%.
Minutes from the latest MPC meeting showed the revised estimate.
There was further good news for the economy from a survey by the CBI, which indicated strong growth in orders for UK manufacturers.
The business lobby group said orders had been growing at the fastest pace since 1995.
As well as revising up the estimate for the first quarter of the year, the MPC minutes said that growth in the second quarter was "expected to be only a little weaker".
Healthy industrial production and strong household spending figures were behind the upgrade.
The minutes noted that: "The domestic recovery was building momentum, with some signs of a modest rebalancing toward investment."
However, there was some debate among the MPC members as to whether the increase in self-employment - which has been behind the recent fall in jobless figures - indicated a rise in under-employment.
The minutes showed that the MPC voted unanimously to keep interest rates on hold at 0.5%.
The CBI survey of 405 manufacturers found that export orders were up strongly and plans for investment "remained particularly robust".
"Confidence is rapidly rising among British manufacturers," said CBI chief policy director Katja Hall.
"There are still bumps in the road ahead, with only a tepid recovery likely in the eurozone, the pound creeping higher and a rapidly evolving situation in Ukraine.
"However, expectations for growth in the coming three months are positive and manufacturers plan to significantly ramp up investment in the year ahead."
The survey found that 38% of businesses reported an increase in total orders during the three months to April, with 17% seeing a decrease.
The positive balance of 21% was the highest since April 1995, although the monthly figures showed that orders had seen a slight drop in April compared with March.
In addition, there was a positive balance of 33% when it came to optimism among manufacturers, the strongest reading since April 1973.