Business in Britain September 2016

 

Overall business confidence – based on the average of net balances of firms expecting higher sales, orders and profits in the next six months – fell from 38% to 12% according to the Lloyds Bank Business in Britain survey.

The bi-annual survey, now in its twenty-fourth year, gathers the views of over 1,500 UK small and medium sized companies and tracks their overall balance of opinion on a range of important performance and confidence measures. Business confidence is back to levels experienced during the euro debt crisis in 2011/12, but remains well above the low reached during the height of the sovereign debt crisis.

The latest Business in Britain survey was taken after the EU referendum in June and the resulting vote to leave the EU, but ahead of the Bank of England’s announcement of policy stimulus in August. However, a reduction in interest rates was anticipated by the majority of survey respondents.

The most recent survey findings include:

  • A fall in business confidence across all sectors, with the highest drop in the service sectors such as retail & wholesale, hospitality & leisure, and business & other services.
  • The regional picture was varied, with confidence lowest in London and Scotland.
  • Economic growth is predicted to slow, but not contract sharply.
  • Outlook for demand, employment and investment have weakened.
  • Export prospects have weakened, particularly with Europe and Asia.

For more recent trends alongside a sectoral and regional view, read the full Business in Britain September report.

Tim Hinton, Managing Director, Mid Markets and SME Banking, Lloyds Banking Group said:

"Clearly, the big event of recent months has been the Referendum in June, in which the British people voted to leave the EU. While exit negotiations have not yet formally started, it has introduced some uncertainty for companies. The key message from the latest survey is that business confidence has declined since the start of the year."

"It seems clear from our survey that economic growth is likely to slow, following a relatively robust performance before the vote. All key metrics in our survey, including the outlook for demand, employment and investment have weakened. This was replicated in all sectors and the majority of regions."

"Nevertheless, it is important to put this into context. While sentiment has fallen to a four-year low, it remains well above the lows reached during the global financial crisis of 2008/9, and the banking sector today is in a significantly stronger Capital position than in 2009." 

"We look forward to supporting you on your strategic plans and wish you every success in the remainder of 2016 and beyond."

Download the Business in Britain report here.

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