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.
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 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.
"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.
