18/11/2008 - Firms pessimistic over economy
Companies have become increasingly pessimistic about the outlook for the economy with business confidence hitting a new low, a report has revealed.
According to a Lloyds TSB survey of 200 companies, optimism plunged to its lowest level since the study was launched in 2002. Seven out of 10 firms were found to be gloomy about the current economic climate, while 40% of those questioned feared that business activity would fall over the coming 12 months.
With firms battling increasing costs, rising business rates and insurance bills while chasing diminishing amounts of consumer expenditure it is easy to see why businesses are lacking confidence.
Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "In a case of every cloud has a silver lining. The weak pound should, in time, give a welcome boost to the manufacturing sector.
"UK manufacturing output has declined in recent years but those businesses that are left are highly productive and can take advantage of the accelerated fall in the pound to compete aggressively overseas, even as global growth prospects dim.
"Elsewhere in the UK, the outlook is far from rosy. Rising unemployment and the high cost of borrowing means business confidence continues to break survey records, as firms take an increasingly bleak view of their prospects."
Copyright © Press Association 2008
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