12
Apr
UK business confidence 'hits four-year high'
Business confidence has reached its highest level in four years,
according to a survey of UK companies.
The Business Trends survey from accountants BDO shows both
confidence and output back at pre-recession levels.
However, the report warns that a "significant increase" in
investment in the private sector is needed to sustain the
recovery.
It said that business optimism could be "short-lived" without
the investment.
The rise in output was put down to companies deciding to
re-stock after letting their stock levels run down during the
recession.
This provides only short-term support for economic growth, BDO
warned.
It added that the investment needed to ensure longer-term growth
was being hampered by uncertainty over plans for the public
finances following next month's general election.
"The economy is showing signs of improvement, but the main
political parties risk frittering this opportunity away if they
don't provide clarity for businesses now," said Alex White, a
partner at BDO.
"Political parties are keeping businesses in the dark on the
substantive impact of their policies... uncertainty created here is
an enemy to investment."
BDO's survey covered 11,000 companies from a range of
industries.
Risk appetite
Meanwhile a survey of chief financial officers (CFOs) at UK
companies has also indicated a rebound in confidence.
The survey, by business services company Deloitte, shows that
business appetite for financial risk is at its highest level since
early 2008.
"CFOs have significantly reduced the level of balance sheet
financial risk over the past year, but this process seems to be
drawing to a close," explained Ian Stewart, Deloitte's chief
economist.
"This recovery in corporate risk appetite mirrors the behaviour
of financial markets where risky assets, such as equities, have
outperformed safe assets such as gilts and cash."
source: www.bbc.co.uk/news Monday 12th
April 2010