UK economy
Britain\'s economy is slowly starting to pick up and growth is forecast at 0.6% for the second quarter (Reuters)

Britain's biggest businesses want to expand and are growing hungrier for risk as data shows that the UK economy is recovering.

According to Deloitte's quarterly survey of chief financial officers (CFOs), 45% of respondents think it is time to take more risk onto their company's balance sheets. The survey shows that risk appetite among CFOs is now at the highest level in six years.

The Q2 report also found that only 34% of CFOs think cost cutting is a priority, down from 42% in the quarter before.

Across the three months to June, manufacturing, construction, and service sector output rose, which trumped expectations and implied that there will be a 0.6% GDP growth in the quarter.

Both consumer and business confidence is also rising as the worst of the Eurozone crisis appears to be over. The UK has already avoided a much-feared triple-dip recession at the beginning of 2013.

"Expansion is back on the agenda for many businesses with expectations for hiring and investment back to levels not seen since early 2011 when the world seemed set for recovery," said Ian Stewart, chief economist at Deloitte, which surveyed 37 CFOs from FTSE 100 companies and 45 from the FTSE 250 between 14 and 28 June.

"It is particularly encouraging to see the move toward growth among UK-facing companies. These companies have been consistently more defensive than their international facing peers in the last two years.

"Their shift towards more pro-growth strategies is a sign of an improving UK outlook."

While 73% of CFOs surveyed said their businesses face a "high or very high level of external macroeconomic uncertainty", this is down significantly from the 2011 peak of 97%.

Furthermore, only 9% of CFOs think the Eurozone may still break up, down from 36% the year before. Only 23% say the UK will experience another recession, which is a fall from 47%.

Going for Growth

Growth in Britain's powerhouse service sector - which represents three quarters of GDP - soared to its highest level in over two years during June.

The Markit/CIPS Purchasing Managers Index (PMI) for the UK service sector hit 56.9 in the month, up from May's 54.9. Any reading over the neutral 50 mark signifies growth in the sector.

Not only did growth accelerate in June but there were the highest levels of new business and sharpest rise in employment in six years.

"Surging growth in the service sector accompanied a resurgent manufacturing sector and modest growth in construction in June for an increasingly broad-based economic upturn," said Chris Williamson, chief economist at survey compilers Markit.

"Growth in services and manufacturing is now the strongest for just over two years, while the construction sector is enjoying the fastest pace of expansion for over a year."

Optimism among Britain's financial firms is growing. A quarterly survey of the financial sector by the Confederation of British Industry (CBI) and PwC found that business volumes had continued to pick up in the three months to June and higher profitability is being reported overall.

"These very positive responses suggest that, barring any external economic shocks, the recovery in financial services sentiment that began at the end of 2012 will be sustained for the remainder of the year," said the CBI/PwC report.