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Business optimism at 22-year high

Business optimism at 22-year high

Category: Business

Updated: 10/02/2014
First Published: 10/02/2014

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 It is now over 6 months old so the content may be out of date.

With the recovery taking hold it seems that businesses are becoming increasingly confident, with the latest survey from consultants BDO finding that optimism among UK businesses is at its highest level for 22 years.

The optimism index, which measures business performance expectations two quarters ahead, jumped to 103.8 in January from 103.4 in December – its highest level since 1992, indicating that businesses predict strong performance over the year ahead.

This is further backed up by BDO's employment index (which measures businesses hiring intentions) with it reaching its highest level since 2008, perhaps suggesting that more jobs could be on the cards.

Meanwhile inflationary pressures don't seem to be too much of a concern for businesses with the inflation index being at its lowest level since 2009, while productivity remains at levels last seen in 2005 – further validating growth prospects, which could be enhanced by the use of various commercial finance options such as bridging loans or commercial mortgages.

"UK business confidence has hit record highs as we enter 2014 and we expect the economy to grow rapidly in the first half of the year," said Peter Hemington of BDO.

"Companies are raising headcounts in response to rising client demand and the data suggests that the unemployment rate is likely to fall below the Bank of England's 7.0 percent threshold for considering raising interest rates in the very near future."

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