Business confidence is increasing in the UK, according to the latest Lloyds TSB Corporate Markets Business Barometer.It shows that after a third consecutive monthly rise, business confidence levels were at their highest in a year during May.Some 44 per cent predicted a rise in business activity when questioned last month, compared to 35 per cent out of April's sample. The number expecting activity to worsen fell from 21 per cent in April to 16 per cent last month as the barometer balance increased by 14 per cent.
Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "While it would be premature to talk of an end to the recession, we should be careful not to overlook the significance of the growing confidence we are witnessing amongst businesses." He stated that confidence is "always the foundation" on which any recovery is built. Mr Williams added that three consecutive months of growing optimism amongst UK businesses had been seen, meaning an economic recovery should not be too far behind if this persists over the coming months.
Earlier this month, Defaqto economist Michael Baxter claimed low interest rates and quantitative easing are leading to an improvement in economic conditions.
APA believes there is some relaxation in the market and that will tend to fuel a little more calculated risk taking and some spending but recommends that businesses should exercise caution over the summer months and look again in September before doing anything radical.
Gareth
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