Business confidence continues to improve and the banking and finance sector is particularly optimistic about prospects for the year, according to the latest survey from ICAEW and Grant Thornton.

The ICAEW/Grant Thornton UK Business Confidence Monitor (BCM) index for Q2 2013 stands at 16.7, up from 12.8 the preceding quarter and its highest level since Q3 2010.This suggests the economy will grow by 0.6% this quarter.

The findings indicate positive confidence in all regions in the UK, all sizes of businesses and across all sectors. The banking, finance and insurance sector is the most confident at 30.1.

Scotland and Yorkshire and Humber are the most optimistic areas, while has been a sharp improvement in construction sector confidence which now stands at 22.7, compared to -8.1 in Q3 2012.

The survey shows exports expected to grow by 4% in the next 12 months, which would return the UK to pre-crisis levels of growth. However, growth in business investment remains weak at 1.7%, and recruitment plans remain broadly unchanged, with companies expecting to increase employment by 1.3% over the year and salaries predicted to rise by 1.5%.

Grant Thornton CEO, Scott Barnes, said: 'Domestic demand is stable and export growth is expected to improve, these are key components for further economic improvements.

'Disappointingly reported plans for investment remain weak, however there are clear signs that things are moving in the right direction and hopefully this wave of confidence shall see business beginning to free up their cash reserves.'