Confidence Among British Companies Improves at Fastest Pace in Three Years
Confidence among British businesses is showing signs of improvement as the country emerges out of lockdown and tries to resume normal
Confidence among British businesses is showing signs of improvement as the country emerges out of lockdown and tries to resume normal operations, but remains pessimistic over uncertainty about recovery. According to a recent survey by Lloyds Bank, business confidence has increased to -14% from -22, posting the biggest monthly rise seen since three years.
The UK economy has suffered the most severe contraction recorded in modern history on account of the ongoing coronavirus pandemic, with GDP for Q2 touching -20%. While economists expect the GDP for the current quarter to register growth, economic recovery is expected to take longer with business confidence still remaining in negative territory, indicating pessimism.
The impact of the coronavirus on business has also declined slightly, with demand being negatively impacted for 62% businesses in August. In the previous month, 66% businesses had reported a negative impact on demand as a result of the pandemic.
Senior economist at Lloyds Bank Commercial Banking, Hann-Ju Ho, observes, “With business confidence sitting well below the long-term average, and official data for Q2 confirming the UK re-entered recession, the shape of any economic recovery remains highly uncertain. Nevertheless, it is encouraging to see gradual improvements in trading prospects and economic optimism, albeit from a low base, which will hopefully continue over the coming months.”
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