28th November 2007
Business confidence 'robust', despite credit crunch
UK firms remain optimistic despite the rise in oil prices and the credit crunch, according to a report by accountants BDO Stoy Hayward.
The BDO Business Trends report, which gathers together information from the main business surveys in the last month, shows that business people are on balance still optimistic that economic growth will continue at an above-average rate.
However, the BDO Output Index, which predicts business confidence for the coming quarter, fell 0.4 points to 100.4 – its lowest level for 18 months.
BDO partner Peter Hemington said: "Despite fears about the impact of the credit crunch, the rising cost of oil and a weakening of consumer demand, UK business remains defiantly positive about the future."
He warned, though, that optimism was clearly falling, adding: "If this trend continues we will surely see the rate of growth of the economy falling as we move further into 2008."
The report also charts businesses' expectations for inflation, which have fallen markedly this month. "Given that inflationary expectations remain strong, we suspect the MPC will hold rather than cut interest rates this month," Hemington added.
The BDO Business Trends report, which gathers together information from the main business surveys in the last month, shows that business people are on balance still optimistic that economic growth will continue at an above-average rate.
However, the BDO Output Index, which predicts business confidence for the coming quarter, fell 0.4 points to 100.4 – its lowest level for 18 months.
BDO partner Peter Hemington said: "Despite fears about the impact of the credit crunch, the rising cost of oil and a weakening of consumer demand, UK business remains defiantly positive about the future."
He warned, though, that optimism was clearly falling, adding: "If this trend continues we will surely see the rate of growth of the economy falling as we move further into 2008."
The report also charts businesses' expectations for inflation, which have fallen markedly this month. "Given that inflationary expectations remain strong, we suspect the MPC will hold rather than cut interest rates this month," Hemington added.
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