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Business confidence soars

Business confidence soars

Category: Business

Updated: 18/08/2010
First Published: 18/08/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Business confidence soared to its highest level since 2007 in the first half of this year.

The rise was mostly due to businesses' optimism in growing export sales, according to
the Lloyds TSB Commercial.

The index, which measures firms' outlook for sales, order book and profitability, recorded a net positive balance of 18% in June.

In addition, 42% of firms said they expect a rise in foreign sales during the next six months.

The weaker pound and the rise in world demand are the reasons behind the rising confidence in exports.

"Business confidence is on the turn. After such dramatic lows, this revival is a real sign that businesses are genuinely hopeful for the future, and it is clear that many firms now see better sales and profitability on the horizon," said John Maltby, managing director of Lloyds TSB Commercial.

Manufacturers had the most confidence in the growth of export sales.

The biggest concern for most UK businesses was weaker domestic demand, with businesses in the public sector the most worried.

"The UK is on the road to recovery, led by improvements in business confidence," said Trevor Williams, Chief Economist, Wholesale Markets.

"The question now is how this renewed confidence will shape the recovery. History tells us that emerging from recession is not always a smooth ride, and we should not expect the coming months to be easy. However, if confidence holds up, we should avoid the double dip that many have feared," Mr Williams added.

If your business is going through something of a rejuvenation after a tough couple of years and you'd like to earn some interest on your profits, there are a number of accounts that are tailor made for businesses.

The Santander Business Reward Saver Account is ideal for businesses that know they require instant access to their money.

It pays a rate of 1.84% gross/AER (variable) if one withdrawal is made in the first 12 months, or 2.00% gross/AER (variable) if none are made.

These rates include a 1% gross/AER variable rate bonus for the first 12 months, while a reduced rate of 0.10% gross/AER will be paid on the full balance on the account for the month in which a withdrawal is made.

A minimum balance of £30,000 is required, but there are no monthly fees.

For firms which will not require immediate access to their funds, a rate of interest of 1.96% gross/AER is currently available through Investec's Business High 5 Account.

The account has a minimum £50,000 deposit, while three months' notice is required to make a withdrawal.

Alternatively, firms which can afford to spare at least £50,000 for a minimum period of one year could achieve an interest rate of 2.50% gross/AER (fixed) with Santander's One Year Fixed Rate Business Bond.

This particular business account provides the certainty of a guaranteed interest rate on a firms' surplus cash.

However, no withdrawals or early closure of the account is allowed prior to the maturity date of 1 September 2011.

As the withdrawal restrictions attached to the Santander business bond demonstrate, knowing which type of business account best suits a firm's needs but makes their cash work hardest for them is essential.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.