Businesses in the UK are becoming increasingly confident about their future prospects and the health of the country's economy.
Business confidence improved for the third consecutive month in May, according to Lloyds TSB's Corporate Markets Business Barometer, and is now at its highest level for a year.
The number of companies expecting a rise in business activity was 44 per cent last month, compared with 35 per cent in April. The number that forecasted worsening conditions fell from 21 per cent in April to just 16 per cent in May.
Encouragingly, there was also an upturn in businesses' views on the state of the wider economy, with four in ten expecting conditions to improve.
Sixty one per cent said they felt more optimistic than pessimistic, while just 21 per cent felt the opposite was true – a vast shift from April, when the gap between the two measures was only 11 per cent.
There was notable improvement in confidence from firms in the industrial and services trades.
"While it would be premature to talk of an end to the recession, we should be careful not to overlook the significance of the growing confidence we are witnessing amongst businesses," said chief economist, Trevor Williams. "Confidence is always the foundation on which any recovery is built. We've now seen three consecutive months of growing optimism amongst UK businesses, and if this persists over the coming months, the recovery should not be too far behind."
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