British businesses optimistic

Businesses are feeling increasingly confident about the future of the British economy, according to new research.

16:44 18 July 2005

Businesses are feeling increasingly confident about the future of the British economy, according to new research.

The Lloyds TSB Business Barometer has revealed that 48 per cent of firms were feeling optimistic about the economic outlook of the nation during June, the overall balance rising by four points since May of this year.

It is thought that this growing confidence is largely due to an expected cut in interest rates in August.

Chief economist for Lloyds TSB, Trevor Williams, explained: "A cut in interest rates of one quarter per cent, perhaps as soon as August, would certainly help to cement the slight improvement in business sentiment and would do little to harm inflation."

Rates have remained at 4.75 per cent for 11 months now, hence the previous pessimism in the air concerning the economy.

This growing confidence is not however reflected in the attitude of businesses towards their own prospects.

The barometer detected that the balance in terms of expected business activity decreased slightly from May to June, indicating a growing pessimism in personal performance.

"One likely cause of the slight fall in confidence among businesses for their own outlook, is the breach of the $60 price for a barrel of oil," said Mr Williams.