Business confidence on the up again

Date: 8th September 2009

Britain's smaller businesses are feeling more confident now than they did at any point since the beginning of last year.

The Lloyds TSB Corporate Markets Business Barometer for August has risen to a 15-month high, with 32 per cent more businesses expecting activity to increase over the next year, rather than decline.

Meanwhile, opinions about the UK economy as a whole were also found to be getting more optimistic, with 46 per cent more firms expecting an improvement instead of a worsening of the recession.

In July, this positive balance had stood at just 30 per cent.

The Lloyds TSB poll reflects recent official figures for both the manufacturing and services sectors, which showed a return to growth after months of credit crunch-induced contraction.

Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "We're now seeing a clear upward trend in firms' confidence about their own prospects and those for the economy as a whole.

"As global demand stabilises and shows signs of recovery, businesses are once again starting to rebuild their stocks, after many months in the doldrums. And that's giving them reason to be more upbeat."

However, the expert added that some of the improvements to the economy could have come about only due to the low interest rates and quantitative easing imposed by the Bank of England in recent months.