Business optimism picked up significantly last month, according to the latest Institute of Directors (IoD) survey.

The IoD cautioned that much of the improvement in the results may be seasonal and should be treated with care. In addition, the IoD also pointed out that within the overall performance of the economy, the manufacturing sector continues to underperform and indeed remains in recession.

Head of the IoD's policy unit, Ruth Lea, said: "Performance is patchy with the manufacturing sector and exports noticeably weak - but the housing market is warming up and the services sector continues to grow."

Meanwhile, companies offering financial services have begun to shake off the fears of a major slowdown that have been hanging over the sector since last spring.

A survey by the Confederation of British Industry and PricewaterhouseCoopers shows business optimism improving for the first time in a year.

Firms said that overall, business volumes picked up, despite previous expectations of a marked slowdown. This growth is set to continue with expectations at the highest point since last year.

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