British Businesses Pessimistic About Economy: Survey

A survey by Lloyds Bank Corporate Markets (LBCM) reveals most big British businesses are pessimistic about the UK's economic prospects.

Fifty three per cent of businesses with a turnover of more than £1 million are pessimistic about the economy, according to the survey of 304 companies.

That is a three-year low for confidence, said LBCM, and suggested Britain was "more likely than not" to fall back into recession.

"Our survey seems to indicate that companies in the UK are bracing themselves for a period of stagnant or even negative growth, with the eurozone crisis affecting confidence across the board," said Trevor Williams, chief economist.

Thirty per cent of respondents said they are optimistic about Britain's economic future.

"Our survey also suggests that falling unit costs are helping firms to mitigate the impact on their margins from lower output prices," said Williams.
"The economic outlook will depend on whether recent actions by European policymakers will help restore confidence."

The Treasury has said that the UK "is not immune to the difficulties faced by our main trading partners in the eurozone".

Long List of Double-Dip Recession Predictions

Lloyds is not the first to point to a double-dip recession for Britain.

Since October, people have lined up to predict another economic downturn.

Just before the New Year, the thinktank Institute for Public Policy Research predicted a "serious recession" in 2012 because of public spending cuts.

In November, the global organisation representing the world's wealthiest countries, the Organisation for Economic Co-operation and Develop-ment (OECD), warned that Britain would soon be back in recession. A leading business advisory group, BDO, predicted that the British economy will contract this quarter because of a declining services sector.