Business confidence at odds with service sector growth data
Increasing political and economic uncertainty in the UK following the EU referendum has led to a four-year low in business confidence, according to the latest figures in the Lloyds? Bank Business in Britain report.
The report’s confidence index built from an opinion survey of 1, 500 small to medium-sized firms across the country showed that while confidence was down in all areas, the UK service industry held the bleakest outlook on economic prospects. The sector showed an average decline of 30 points across the areas of hospitality, leisure, retail and wholesale.
According to the index, the drop in confidence was primarily a result of economic uncertainty and a weaker demand in UK products and services following a summer of upheaval in the British political system.
The number of businesses that expected to see sales, orders and profits rise over the next two quarters fell to 12 per cent down 26 per cent from January.
In a statement, Tim Hinton, managing director of mid markets and SME banking at Lloyds? Bank, said that until the UK’s new deal with the EU is made clear, confidence amongst businesses will remain low.
“The EUreferendum vote has introduced a level of uncertainty for companies as the UK decides on the best model for its future relationship with the EU and this is likely to continuefor the foreseeable future, he said.
Jon Pulford, regional director of SME Banking for the East Midlands at Lloyds? Bank Commercial Banking, continued to emphasise the Brexit effect, stressing that low confidence levels should be viewed in the context of the recent economic and political shocks, notably the EU referendum vote.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.