Economic optimism is on the up, a report by the Institute of Directors (IoD) has found, with business leaders feeling more upbeat about the year ahead than they did this time last year.

In a survey of 1,369 IoD members, the findings showed that the proportion of business leaders who believe this year will be an improvement on 2012 is higher than the number who believe it will be worse by a margin of +31%. This compares to last December, when the balance was -31%.

IoD Chief Economist Graeme Leach said: "2012 was a tough year, but business leaders expect 2013 to be much better. The risk of a return to recession and a triple dip has not gone away, but it is receding fast, and expectations of growth are rising."

"George Osborne's approval ratings have suffered, but he retains business support overall. The deficit reduction programme in particular has overwhelming backing from UK directors - the government absolutely must not waver from the course."

The poll also indicated that long-term confidence has risen, with the balance of those expecting higher UK GDP growth over the coming 10 years compared to the previous decade rising to +22%, compared to -9% in Q1 2012, -8% in Q2 and +10% in Q3.

Of the respondents, 16% thought the risk of a return to recession was high, 49% moderate and 34% low. This compares with 2012 when 35% said the risk was high, 53% moderate and 11% low, meaning that the proportion foreseeing a high risk of recession has fallen from approximately 1 in 3 to 1 in 6.

The survey was carried out between December 12th and 20th, 2012.

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