UK may soon pull out of recession

LONDON: Britain���s recession may be ending, the country���s accounting fraternity declared on Monday after a key index tracking business confidence among its members staged a steep jump. The Institute of Chartered Accountants in England and Wales (ICAEW) reported that the business confidence measure jumped to 4.8 at the end of June from -28.2 in March ��� the biggest improvement since the survey began in 2003. The institute predicted that the economy would grow 0.5% this quarter, breaking five quarters of declining output.

This is the first such highly-upbeat report in the UK, which has lagged behind France and Germany, both of which officially are out of recession. Britain���s GDP fell by 0.8% in the last quarter. The first positive confidence report in a long time sent the London market���s benchmark FTSE index 0.5% up in mid-day trade.

The report says information technology is the most confident sector, followed by banking, finance and insurance, and then property. Both banking and finance and property, pillars of the UK economy, have been in doldrums for a while, but showing signs of revival. The ICAEW constructs its index based on responses from 1,000 chartered accountants every quarter. ���This quarter���s BCM suggests that the UK recession is at an end. However, the recovery is very fragile and I would urge policy makers not to take any actions that could derail it,��� said Michael Izza, chief executive of the ICAEW.

When asked, 41% of senior business professionals were more confident about economic prospects facing their business in the next year. However, only 6% were much more confident, indicating that caution remains about the strength and timing of the recovery.

In a separate survey on services this week, the Confederation of British Industry (CBI) has said that while the services sector continued to be below normal, the fall has stabilised. In business and professional services, the value and volume of business rose slightly, while for consumer services, the decline has slowed. Lai Wah Co, Head of Economic Analysis at the CBI, said: ���Business conditions remain difficult for service sector firms. However, service sector activity has not been anywhere near as weak as in recent quarters and things are starting to look up, particularly for business and professional firms.���