UK is 'emerging from recession', according to leading business bodies

The end of the UK's recessionary tunnel could be in sight, according to business experts at the Institute of Chartered Accountants in England and Wales (ICAEW).

A survey carried out by the ICAEW covering the third quarter found that confidence among businesses had moved into positive territory for the first time in two years.

The Institute's UK Business Confidence Monitor Index registered a swing from a negative 28.2 to a positive 4.2, the highest the index has been since the third quarter 2007.

Looking at a range of financial performance indicators and taking into account a number of interventionist policies such as quantative easing and the fall in interest rates the ICAEW concluded that "on balance the economy appears to be emerging from recession".

However, despite 41 per cent of senior business professionals polled by the survey expressing greater confidence for next year caution remains surrounding the strength and timing of a recovery.

Michael Izza, the ICAEW's chief executive, said there was "no doubt" the UK economy was on its way to recovery, with businesses taking the "right actions" to mitigate the downturn's impact.

However he warned that the recovery was "very fragile" and urged policymakers "not to take any actions that could derail it".

Many retailers fear the return to a 17.5 per cent VAT rate at the beginning of next year could undermine what consumer confidence exists.

Meanwhile the latest poll from business group the CBI found that the value and volume of business in bars, restaurants and other leisure providers fell slightly in the last three months, but "at much slower rates than in the previous three quarters".

Prices were being cut and this was having an impact on profits in the past three months, the CBI added.

These were likely to stabilise in the next quarter, it said.