Stagnation set to continue, top accountancy firm warns
Output index falls to two-year low
UK business confidence rose slightly in August, but growth will remain slow, according to the new business optimism survey from BDO.
The survey, which aggregates several subsidiary reports to gauge the mood of the business community, rose 0.4 points to 95.5.
However this figure is still very low in comparison to previous months, suggesting that British businesses remain anxious about the future of the economy.
Furthermore, several of the subsidiary surveys indicated widespread stagnation. In fact the output index, which asks businesses to forecast their turnover for the coming months, fell 93.6 – its lowest level since June 2009.
Peter Hemington, a partner at BDO, said: “It’s worrying to see such a reliable growth indicator fall to a two-year low.
“Our predictions should serve as a wake-up call to policymakers that action must be taken to avoid economic contraction.”
However, the BDO research unearthed more positive results with regard to inflation; indeed the survey showed a monthly fall in expectations of inflation for the first time since December 2010.