Recession in Britain 'at an end'

More workers are forecasting a better time ahead Confidence among business professionals has surged, suggesting the recession is at an end, a survey has said. The Institute of Chartered Accountants' index of business confidence rose to 4.8 at the end of June, from -28.2 in March, the biggest rise for two years. However, chief executive Michael Izza warned against "underestimating" the challenges ahead for businesses. The institute predicts the UK economy will grow by 0.5% in the third quarter of 2009. Its forecast comes after the economy shrank by 0.8% in the second quarter of the year. More than 1,000 chartered accountants were surveyed across England, Wales and Scotland. Investor confidence about the UK economy also appears to be growing, with the UK's main FTSE 100 share index ending Monday trading at a 10-month high of 4,896, up 0.9% on the day. More optimism "This quarter's Business Confidence Monitor suggests that the UK recession is at an end," said Mr Izza. Many are now more optimistic that the global recession is ending. Japan, France and Germany have all recently emerged from recession in the second quarter between April and June, as have Asian economies like Thailand and Hong Kong. US Federal Reserve chairman Ben Bernanke has also said that the US, the world's largest economy, is approaching recovery. While initial figures showed that neither the US or UK grew in the second quarter, many expect economic output to return to positive territory in the three months to September. "The considerable stimulus from the easing of monetary and fiscal policy and the past depreciation of sterling should lead to a recovery in economic activity," the Bank of England said earlier this month. 'Challenge' The confidence survey said that 41% of senior professionals were more confident about their business prospects in the next year, but only 6% were much more confident, indicating that some caution remains. The banking sector saw a big rise in confidence "While there is no doubt that the UK economy is on its way to recovery, we shouldn't underestimate the challenges ahead for businesses," said Mr Izza. IT was the most optimistic sector, followed by banking, finance and insurance. The institute said the banking sector in particular had shown "a remarkable upturn given the turmoil of the last two years". The least confident professions were health and education, as fears of cuts in the public sector grow. Reservations Policymakers have been wary of stoking expectations that the UK's economic woes are over. "The pace of recovery over the next few years is highly uncertain," said Bank Governor Mervyn King. The Bank surprised the financial markets by injecting £50bn of new money into the economy earlier this month, more than the £25bn that had been expected. The move, which took the total to £175bn, is viewed as a sign of how divided the Bank committee members that set interests rates are over the recovery in the UK economy. In addition, the number of jobless in the UK is now at its highest level since 1995, with 2.4 million people out of work.



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