Business output has soared to the highest level in nearly two years - marking a 'turning point' for the UK economy.

Research showed that business activity rose for the second successive month in March.

Accountancy firm BDO said its output index climbed to 103.39 - the highest since May 2022. Above 95 indicates growth.

The rise was driven by falling inflation - recorded at 3.4% in February - but experts said we're not out of the woods yet as measures of business optimism and employment rates both tumbled.

BDO's business optimism index declined by 0.16 points to 99.33 - the first drop since November.

And the employment index fell for the ninth consecutive month to 98.32 last month - its weakest point in nearly 11 years.

Kaley Crossthwaite, partner at BDO, said: "Output reaching its highest point in nearly two years illustrates the UK's robustness in the face of global economic adversities and is a big step towards economic stability and growth.

"For businesses, the main mood right now is cautious optimism - with drops in the Employment and Optimism Index showing that we're not out of the woods just yet.

"All eyes are on the Bank of England, with an interest rate cut looking possible for June, as businesses hold out hope for a further recovery this year."