Business confidence in the UK has risen to its highest level since the start of the financial crisis, boosting hopes that an end to the recession is at hand.

Based on the findings of its quarterly Business Confidence Monitor (BCM), the Institute of Chartered Accountants in England and Wales (ICAEW) now predicts third-quarter GDP will rise 0.5pc, breaking five quarters of declining output.

The news comes as positive noises emanate from both sides of the Atlantic.

By Jonathan Liew, Angela Monaghan and Garry White

Over the weekend Ben Bernanke, chairman of the US Federal Reserve, gave his strongest signal yet that the slowdown is on the verge of ending.

Speaking at a gathering of the world's central bankers in Jackson Hole, Wyoming, Mr Bernanke said: "Prospects for a return to growth in the near term appear good."

Mr Bernanke also lauded the "aggressive and complementary" steps taken by central banks and governments to address the crisis, although he warned that any recovery was likely to be "relatively slow at first".

The BCM surveys 1,000 senior businessmen on their economic confidence over the next 12 months and 41pc of respondents are now more confident about their prospects than last year.

The BCM saw its biggest-ever quarterly rise, and moved into positive territory for the first time since the third quarter of 2007. IT, banking, finance and insurance and property were the most confident sectors of the economy.

"This suggests that the UK recession is at an end," Michael Izza, chief executive of ICAEW, said. "Policies such as quantitative easing, the fall in interest rates and the VAT reduction have all helped improve business confidence."

There are also signs of a recovery of business levels in the services sector, which are still below normal, but less so than in the previous three quarters, according to the latest CBI Service Sector Survey. The stock market recovery is also progressing. The FTSE 100 hit a 10-month high on Friday, 38pc above its March low.

Mr Bernanke's sentiments over the weekend were echoed by Kenneth Rogoff, Harvard professor and former chief economist of the International Monetary Fund. He said that there was "no question the global economy is healing and emerging from recession".

In Germany, business confidence in August hit its highest level since January 2006, according to a purchasing managers' survey, prompting Klaus Baader, chief European economist at Société Générale, to declare: "The recession is over."

The ONS said last month that the economy contracted by 0.8pc in the second quarter, but economists think this figure will this week be revised to show a smaller contraction after the agency overestimated the drop in industrial production and underestimated growth in retail sales volume.

Source: Telegraph.co.uk