Over half of UK plc considers the UK economic outlook to be bad,
although 42 percent of business leaders said they were confident
about their prospects, according to a new study by KPMG, the
accountancy firm.

KPMG’s National Business Confidence Survey added that
the mood of British businesses has lifted from the rock bottom
reached last spring.

“In fact, levels of confidence among senior executives about
their business prospects are the highest since spring 2008, despite
an increase in the number facing financial difficulty,” said the
firm.

However, one in three businesses has admitted to experiencing
financial difficulties, with the number facing higher financing
costs growing to 51 percent, versus 41 percent last quarter.

Malcolm Edge, head of markets for KPMG in the UK, commented:
“Given the increase in concerns relating to financing, it is
perhaps no surprise that our survey found nearly one in four
businesses have seen their banking relationship worsen.

“The vast majority of businesses now have a strategy to reduce
business overheads. Four in five companies are exploring measures
including improving efficiency, reducing third party spend, cutting
headcount, freezing recruitment and reducing their inventory.

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“It’s quite peculiar that in tandem with a worsening in the
financial problems businesses are grappling with, their confidence
levels have risen. It perhaps demonstrates that even as their
agendas are being hit by new challenges, they are taking heart from
the relative stability in the economy over the last few months – a
period without dramatic and negative announcements.”

Jason T Hesse