2nd July 2008
UK business confidence has dropped to its lowest level in 16 years, according to the latest report from accountants BDO Stoy Hayward.
The BDO Business Trends report, which gathers information from the main business surveys of the past month, reveals that UK firms have a bleak view of the near-term future. The report's Output Index, which shows business confidence for the next quarter, fell to 97.7 points in June - its lowest level since Black Wednesday in September 1992.
The slump is a marked contrast to the end of 2007, when businesses remained optimistic in the face of the developing credit crunch. BDO attributes firms' deepening pessimism to the worsening credit crunch, and rising prices for food and energy.
"UK businesses of all shapes and sizes are struggling to see any light at the end of the tunnel," said BDO partner Peter Hemington.
"With confidence at a 16-year low, an interest rate rise next week aimed at curbing inflation could be crippling for business, and could worsen the effects of the economic slowdown. Our figures suggest that the [Bank of England] will be left with little choice next week other than to leave interest rates unchanged."
Business confidence slumps
The BDO Business Trends report, which gathers information from the main business surveys of the past month, reveals that UK firms have a bleak view of the near-term future. The report's Output Index, which shows business confidence for the next quarter, fell to 97.7 points in June - its lowest level since Black Wednesday in September 1992.
The slump is a marked contrast to the end of 2007, when businesses remained optimistic in the face of the developing credit crunch. BDO attributes firms' deepening pessimism to the worsening credit crunch, and rising prices for food and energy.
"UK businesses of all shapes and sizes are struggling to see any light at the end of the tunnel," said BDO partner Peter Hemington.
"With confidence at a 16-year low, an interest rate rise next week aimed at curbing inflation could be crippling for business, and could worsen the effects of the economic slowdown. Our figures suggest that the [Bank of England] will be left with little choice next week other than to leave interest rates unchanged."
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