business forecaster Experian has said the Basingstoke area could be one of the most successful in Europe within five years.

The research firm believes that the area's economy will grow by four per cent every year - double the average for the European Union.

Andrew Woodward, senior relationship manager for Lloyds TSB Corporate, said: "This underlines the fact that Basingstoke is one of the top regions in which to do business and be very successful - not only in the country, but also in Europe.

"Encouragingly, despite rising interest rates and increased oil costs, firms are feeling very confident about their future prospects, which is great news both for the economy and the local area."

However, he also flagged up a warning that businesses need to be more flexible and forward-thinking when recruiting staff to overcome the skills shortages caused by high house prices and the general cost of living in the region.

The prediction comes on the back of news that business confidence in Basingstoke is booming.

More than half of companies in the area have reported an increase in sales over the last six months.

Results from the latest Business in Britain survey by Lloyds TSB Corporate showed that the proportion of local firms boasting improved orders rocketed to 51 per cent - the third highest in the country and above the national average of 49 per cent.

Hopes are also high for the future.

A total of 58 per cent of Basingstoke businesses predicted turnover will continue to rise for the rest of the year compared with 53 per cent nationally.

With firms also predicting an increase in orders, the Basingstoke area is now second only to the London region.

To cope with increased demand, one in three businesses from the area are planning to recruit more staff over the next six months and only 10 per cent expect to have to shed any jobs.

However, there is still the ongoing problem of a shortage of skilled staff in the region, with 53 per cent of businesses reporting having experienced difficulties in recruiting the right staff this year.

The findings of Lloyds TSB Corporate were supported by business data from the Royal Bank of Scotland.

The bank's senior economist, Stuart Porteous, said: "The South East consolidated its position at the top of the regional growth tables in August as new orders continued to expand at a rapid rate.

"Strong service sector growth has protected the South East from the current soft spot in the US."

He added: "On the downside, input price inflation remains a problem and firms continue to struggle to pass on the full extent of input price rises.

"Despite this, business confidence remains high and recruitment has increased."

August signalled the 17th consecutive month of increased output levels as well as the 13th month for sustained recruitment activity.