Over a quarter of UK businesses plan to take on new staff in the coming year, according to a survey by the Confederation of British Industry (CBI) and Harvey Nash.

The CBI survey showed that 28% of firms planned to increase recruitment over the next 12 months. The data also revealed that just 5% of companies have implemented a recruitment freeze this year - down from over 65% last year.

Just under half of firms plan to raise wages in line with or below Retail Price Inflation and the companies planning to freeze pay has fallen to 16% from 47% in the August/September survey.

Over 80% of firms said that the UK's flexible labour market helped stem job losses and get them through the recession and nine out of ten companies made changes to working patterns in response to the economic downturn.

"We are seeing the first indications in the market that businesses are gearing up for a return to growth and this trend is most concentrated in the technology, financial services sectors and some areas of manufacturing. Although the recovery is fragile, there is a sense that the UK economy as a whole has turned a corner," said Albert Ellis, chief executive of Harvey Nash.