Business pessimism on the rise

UK business confidence has taken a battering in the last four weeks.

According to the latest business barometer from Lloyds Bank Commercial Banking confidence levels amongst British firms fell by five points to 38% in April. Those who are pessimistic about the economy almost doubled from 12% to 22%, with the net balance of firms expecting to increase staff levels reducing by six points to 28%.

However, the net balance of companies reporting an improvement in their own trading prospects increased for the second consecutive month to 49%.

Lloyds also said signs of stabilisation in global economic activity led to a strong rise in confidence in the industrial sector up 10 points to 45%. However, there was a decline in confidence in both the consumer services and business and other services sectors.

It said firms across the North and South reported decreases in business sentiment for the month with the North falling 10 points to 40% and the South 5 points to 38%. But sentiment in the Midlands continued to grow for the second consecutive month by two points to 38%.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Although our survey shows a softening of overall sentiment in April, the net balance remains above the long-term average. Despite the moderate slowdown we are still experiencing positive economic growth and evidence suggests that it will continue in the second quarter”.