Is Britain really coming out of the recession?

There are reports that Britain is coming out of the recession, but are people being too optimistic? A survey by the Institute of Chartered Accountants reports that confidence amongst business professionals has surged. The survey, conducted with more than 1000 chartered accountants across England, Wales and Scotland, found that business confidence had risen to 4.8 percent at the end of June, that's a significant rise from -28.2 in March.

The jump, which was the highest reported since 2007 and the first move by the study, which questions more than 1000 chartered accountants, into positive territory for two years. According to the institute, they predict that the UK economy will grow by 0.5 percent in the third quarter. Its forecast comes after the economy shrank by 0.8 percent in the second quarter of the year.

Of those surveyed, 41 percent of senior professionals said they were more confident about their business prospects in the next year, while only six percent said they were much more confident, indicating that some caution does rightly remain.

It seems that out of all the sectors, IT was the most optimistic, closely 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.

It is believed that policies such as quantitative easing and interest rate cuts by the Bank of England, plus the drop in VAT from 17.5 percent to 15 percent, has helped businesses. But, will the rise in VAT effect businesses again next year when it goes back up to 17.5 percent? As well as this, businesses had also helped themselves by adopting the right measures to ease the slump, such as cutting staff.

Apparently, sentiment was the most upbeat in Wales, followed by Scotland and the North of England, while London and the South East remained the most nervous in Britain.

Despite this, Chief Executive of the Institute of Chartered Accountants, Michael Izza has warned against "underestimating" the challenges ahead for businesses. Britain doesn't want to be too optimistic, announcing that is coming out of recession before all the signs are there. He warned that "the recovery is very fragile and I would urge policymakers not to take any actions that could derail it.

"This quarter's Business Confidence Monitor suggests that the UK recession is at an end. While there is no doubt that the UK economy is on its way to recovery, we shouldn't underestimate the challenges ahead for businesses," Izza said.

We don't want Britain being too optimistic, but if there are signs of the recession ending, does that mean that unemployment is going to start to improve? Currently unemployment in the UK is at its highest since 1995, at 2.4 million, and this was only announced earlier this month.

Although the recession hasn't effected everyone in the same way, the majority of people will still be relieved to hear that there's signs of it ending, so that hopefully, not only Britain, but the rest of the world can come out of the other side. Britain now joins the list of countries which are showing signs of recovery, including Germany and France. The French and German economies both grew by 0.3 percent between April and June, bringing to an end year-long recessions in Europe's largest economies.

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