Business confidence continued to grow in the last three months but the economic recovery is still seen as “very fragile”, an industry body said today.

A survey by the Institute of Chartered Accountants in England and Wales (ICAEW) found optimism jumped from a measure of 4.8 in the previous quarter to 24.6 — the highest reading for the survey since it began in 2003.

But as confidence is measured relative to the previous year, the number reflects the rebound in optimism from the minus 36.3 figure a year ago when businesses were engulfed by the financial crisis.

The ICAEW stressed that while companies were more positive on the outlook, with plans to tentatively increase investment and recruitment, tight credit conditions and concerns over consumer demand continue to trouble firms.

Michael Izza, of the ICAEW, said: “The UK economy is undoubtedly in better shape than this time last year and athough we are still on track for a return to economic growth, the recovery is very fragile and will take time.”