A survey of 1,200 business leaders by the organisation found they have “serious concerns” the recession will continue throughout this year, with only a modest recovery in 2013, the Telegraph reports.

It also found that 54% thought government attempts to reduce taxation had been “ineffective”, with 68% similarly critical over attempts to reduce business regulation.

Meanwhile, 62% felt attempts to simplify employment law had also failed to boost business growth.

The lack of progress by the coalition government meant almost half of the respondents said they had delayed “investment or employment decisions” this year.

Graeme Leach, the chief economist at the IoD, said: “Business is battening down the hatches in the expectation that the recession will continue for the rest of the year.

“The Government’s reform agenda is pointing in broadly the right direction, but the overwhelming opinion of our members is that they are doing too little, too slowly.

“If the Coalition wants to break this cycle of low economic confidence, then they need to take some bold steps that will make a real difference to the cost and complexity of doing business in the UK.”