Confidence in UK businesses reaches a 13 month high

Confidence in UK businesses reaches a 13 month high

Great news for Britain’s economy, as business confidence reaches its highest point since May last year as companies increase output and job vacancies rise. Is the UK economy close to turning itself around or have we still got a long way to go?

UK According to Accountants and business advisory firm BDO,  both services and manufacturing firms had increased in the Optimism index after five consecutive months of improvement. BDO’s survey is put together by taking a weighted average of the results of the UK’s main business surveys, including those from the Confederation of British Industry (CBI) and the Bank of England.

BDO’s research follows from separate data last week which found that British manufacturing recorded its strongest growth in more than two years.

Inflationary pressures also look to be declining according to the data gathered,  BDO’s Inflation Index decreased from 104.2 to 103.4, demonstrating how  financial pressures are easing on UK businesses.

However BDO stressed that although these figures are positive, they are still fractionally below the level which would indicate the economy was going to grow.

Partner of BDO accountants, Peter Hemington said: “While it’s encouraging to see confidence continuing to improve, we should be mindful of the zig-zag trend that has characterised UK business confidence since 2008.”

Some external factors which BDO speculated could be hindering UK recovery inlcuded pressures such as volatility in the eurozone, “belt-tightening” by UK consumers,  the household income squeeze in the UK and the slowing down of the asset purchase programme in the United States

Peter Hemington went on to say: “Periods of improved confidence have ended before growth has really begun to get going. On the last couple of occasions, this has been because of crises in the Eurozone. This time, the worry is that financial market turmoil arising from the actions of the Federal Reserve will choke off yet another nascent UK recovery.

Although it looks like figures are moving in the right direction, it seems we still have a long way to go until we can bask in a fully recovered UK economy.

 

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