UK firms see more jobs but no economic growth - survey

LONDON (Reuters) - British businesses expect to increase hiring over the next six months but given falling confidence among manufacturers, they do not anticipate overall growth in the nation's economy, a survey showed on Monday.

An optimism index from accountancy firm BDO, which measures business performance expectations two quarters ahead, rose to 92.2 in March from 90.6 in February.

But both the optimism and output indices compiled by BDO remained below 95 which marks the dividing line between growth and contraction for the survey, BDO said in a statement.

BDO's employment Index, which measures UK businesses' hiring intentions over the next two quarters, reached 96.0 in March, the highest since August 2011.

The British economy could already be in its third recession in five years although the strength in the labour market has surprised economists.

Service sector confidence rose substantially in March but optimism in the manufacturing sector deteriorated sharply - falling to 88.2 in March from a reading of 94.5 in February, according to BDO.

A falling pound, which makes imported components more expensive, and weak demand for British exports from struggling euro zone economies were among the factors weighing on manufacturers' confidence, BDO said.

"It was disappointing to see little action taken in last month's budget to help this beleaguered sector," Peter Hemington, partner at BDO said of manufacturing.

Manufacturing activity, which accounts for around a fifth of the economy and is at the forefront of the government's recovery efforts, fell for the second consecutive month in March.

The indices are calculated from data including purchasing managers' surveys and surveys by the Confederation of British Industry and the Bank of England.

(Reporting by Dasha Afanasieva; Editing by Ruth Pitchford)

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Britain should focus on roads, not rail - survey

LONDON (Reuters) - British manufacturing firms want the government to shift public infrastructure spending away from rail to focus on upgrading the road network, a poll published on Tuesday showed.

The survey, conducted by industry body EEF, showed that 72 percent of 209 firms who took part cited the road network as the number one priority for investment in transport, compared with just 6 percent for rail.

The current coalition and the previous Labour government put rail at the heart of their infrastructure plans. Both backed the 16 billion-pound Crossrail project in London and the 33 billion-pound "HS2" high-speed rail line that will connect the capital to cities in the north of the country.

Between the fiscal years of 2005/06 and 2011/12, public capital spending on rail increased more than twice as quickly as spending on roads. In 2011/12 the government invested 6 billion pounds in rail, compared to 4.6 billion in roads.

Chancellor George Osborne delivered a budget in March that experts warned would not be enough to fix the country's infrastructure backlog or promote economic growth.

The EEF also called for the creation of an independent commission to deliver infrastructure to take the politics out of long-term decision making.

Osborne said in his budget that he plans to "make greater use of independent advice", alongside the expertise of former London Olympics CEO Paul Deighton who now works in the Treasury.

The government will publish its updated transport strategy later this year.

(Reporting By Christine Murray; editing by Keiron Henderson)

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Survey shows UK financial sector employment rebounds

LONDON (Reuters) - Britain's financial services sector took on new staff in the first quarter with more gains expected, a business survey said, signalling that a prolonged period of job losses may be ending.

The survey from the CBI employer's lobby and consultancy PwC said sentiment in banking improved for a second straight quarter and employment grew by 2,000 in the three months to March.

The same number of new jobs is expected in this quarter.

"The banks' return to confidence continues, although the improvement is less marked than in the previous quarter," said Steve Davies, a partner at PwC.

"Business is expected to improve across retail, commercial and financial segments and headcount has begun to grow again," Davies added.

Banks had been laying off thousands of staff as they try to boost profitability hit by tougher bank capital requirements, fines for misconduct and lower trading volumes.

Despite signs that headcount is edging higher, banks are hesitating over investment because of uncertainty over returns, the survey said.

"Regulation and compliance are still likely to be significant drags on business throughout this year," said Matthew Fell, CBI director for competitive markets.

(Reporting by Huw Jones; Editing by Elaine Hardcastle)

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March house price rise biggest in three years in England, Wales - survey

LONDON (Reuters) - House prices in England and Wales posted their biggest month-on-month gain in three years in March, driven by increases in London, a survey showed on Monday.

House prices rose 0.3 percent from February, the biggest increase since March 2010, according to a survey by Hometrack, a property analysis firm.

In year-on-year terms house prices were flat, the first time they have not fallen since September 2010.

Britain's housing market has been given a boost by the launch last year of the Funding for Lending Scheme under which the Bank of England provides banks with cheap funding to increase loans for homebuyers and businesses.

Last week, finance minister George Osborne announced further measures, including government guarantees for up to 130 billion pounds' worth of mortgages.

In London, prices jumped 0.7 percent in March from February and in the rest of England and Wales they rose in a fifth of postcode areas, the highest percentage for three years, according to Hometrack's survey.

Prices fell in only one region, the north east.

Driving up prices was a 19 percent increase in demand - as measured by the number of potential buyers registering with estate agents - in the past two months while the number of homes for sale rose 13 percent in the same period, Hometrack said.

Its survey is based on responses from estate agents and surveyors across England and Wales.

Other house price measures have shown signs of a recovery. Mortgage lender Halifax said earlier this month that in the three months to February, house prices were 1.9 percent higher than a year ago, the third successive increase in this measure.

(Editing by William Schomberg/Ruth Pitchford)

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