CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. UK Business Confidence Surges

UK Business Confidence Surges

by Robert Lee, Tax-News.com, London

31 May 2007


Confidence and optimism amongst UK businesses is on the up, according to the latest survey by KPMG.

After the slowdown reported in the previous survey, confidence amongst UK businesses has now surged to its highest level since 2004.

KPMG’s latest survey of UK small to medium-sized businesses (classed as having turnover of between GBP5 million and GBP500 million) shows a substantial hike in the number of businesses that are optimistic about their sector’s prospects over the coming twelve months.

When asked how they felt about the prospects for small to medium-sized companies over the next twelve months, almost two in three (64%) of those surveyed predicted a positive outlook; the highest level since 2004, and an increase of 14% on the mood of the previous survey. The outlook for their own business was even more upbeat, with 76% feeling confident about their prospects in the coming twelve months – the highest figure since the survey began back in 2003.

There are also encouraging signs that UK businesses are becoming more positive about their prospects overseas. Almost three quarters (74%) of those questioned felt that small to medium sized UK businesses were either ‘competitive’ or ‘extremely competitive’ within Europe.

Mel Egglenton, UK head of middle market for KPMG, observed that: “Our latest survey shows confidence amongst SMEs is clearly on the up, with levels of optimism as high as they have been for 3 or 4 years. It is also worth highlighting that the people who answer these questions are businessmen, not economists. Therefore, the rationale for their answer is based not on some detailed analysis of macro-economic trends but the health of their order book. So, to see these businesses in confident mood and with healthy order books surely bodes well for the future.”

Egglenton suggested that rising energy costs have forced firms to look hard at ways to improve their efficiency, leaving their businesses in a more robust state than they would have been otherwise. "So it appears that those who felt the pinch over the last year or two have now steadied the ship and are looking forward to the next 12 months with a renewed sense of optimism," she observed.

This quarter, the survey also found a groundswell of optimism about the UK economy, with 58% of those questioned believing that the economy was on an upward curve.

One part of the survey that did highlight a growing concern among many businesses was the questions on interest rates. When asked what should happen to interest rates, 66% felt they should be held at present levels. Egglenton concluded: “Much has been written in recent months about what the Bank of England should do to the UK’s interest rate, and our findings show that two thirds of businesses would like to see interest rates held at their present levels. However, there is an obvious concern among those questioned that interest rates are going to continue to increase; 41% see this as being a major issue in the future. It’ll be interesting to watch what effect any increase will have on the levels of confidence seen in this report.”


To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »