Brighter economic prospects for UK businesses

According to the latest business surveys, confidence is improving across most UK businesses. The Confederation of British Industry said the economy was moving from “flat to growth”, however its forecast for growth will remain at 1% for the remainder of the year. The forecast reflects the “clear challenges” that remained with uncertainty in the eurozone and what it called a muted international outlook holding back investment. The CBI also expects inflation to peak at 3.1% during this quarter and that current inflation could be presenting a problem for consumers who are finding it to be affecting their living standards. Accountancy firm BDO came to the same conclusion as the CBI’s report saying business confidence improved in April, particularly in the services sector. However, BDO also said the outlook for manufacturing “remains bleak”. The BDO survey gauges optimism in business performance and the economy over the next six months. The Index hit 93.0, but this score still fell below the score of 95 needed to indicate growth. Peter Hemington, a partner at BDO, said “The manufacturing sector is a particular concern. If it is serious about its plan to rebalance the UK economy, we continue to believe that the government could do more to help UK manufacturing, particularly by encouraging both lending and investment in the sector.” The CBI’s director-general, John Cridland, suggested that the government’s Funding for Lending Scheme was beginning to have an impact on smaller businesses. He said “When I talk to small businesses, they are already seeing the benefit on cost [of credit], and lower cost leads to more availability.” However, manufacturing has been hit harder by the rising prices of energy and commodities. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Setfords Solicitors are a national full service law firm, with business law solicitors in Canterbury and across the country.