British business confidence hits its highest level for 15 months

Hopes rise of an end to recession after global moves to revitalise the financial system

British companies are more optimistic than at any time in the past 15 months after Europe, Japan and the US pledged to pump more money into the financial system, according to a key new survey that will raise hopes the UK could be emerging from its double-dip recession.

Just four days after the Office for National Statistics (ONS) said the economy shrank less than it first thought in the three months to the end of June, a report showed UK Plc's sentiment hit its highest level since July 2011 last month and suggested that optimism is likely to grow further.

Some 51 per cent of firms surveyed in September said they expected trading to improve in the next year, compared with 47 per cent in August. Only 8 per cent expect sales to deteriorate, according to the latest closely watched survey by Lloyds Bank Wholesale Banking & Markets Barometer.

"It is good to see that firms continue to feel confident in how their businesses are likely to perform over the course of the next year," said Trevor Williams, chief economist at Lloyds Bank Wholesale Banking & Markets. "A big jump in manufacturing output in August alongside continuing gains in employment support the rise in the barometer.

"Policymakers in the UK will likely continue to focus on underlying economic trends which our survey shows is consistent with the latest MPC [Bank of England monetary policy committee] minutes' suggestion of 'modest underlying expansion'," he added.

The report attributed the relatively strong confidence levels to the European Central Bank's new bond-buying programme, which proposed unlimited purchases of short-dated sovereign debt to boost the eurozone economy. The report also notes that the US Federal Reserve has announced a further round of quantitative eassing (QE3) – a method of pumping money into the financial system – since the survey was taken "which may have lifted confidence further".

The Lloyds report provides another dose of good news after the ONS revised its forecast of the UK's second-quarter gross domestic product to a 0.4 per cent drop – from its previous estimate of 0.5 per cent and its initial estimate of a 0.7 per cent decline.

On the same day, Bank of England policymaker Paul Fisher said the Bank expected that gross domestic product in the third quarter – the three months to the end of September – was "very strong", although at least part of the improvement will come from the unwinding of the Diamond Jubilee effect. The Queen's Diamond Jubilee in the second quarter dragged down sales in the period by introducing an extra bank holiday.

"Data from this survey shows that the economy is likely to be emerging from the double-dip recession, which began in the fourth quarter of 2011," the Lloyds report notes.

The Lloyds report also looked at the confidence of British business about the UK economy as a whole, and found it to have remained steady last month, after a sharp rebound in August.

Although sentiment overall remained steady last month, the survey showed a slight increase in confidence among service companies last month compared with the previous month, and a slight decrease among manufacturers.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
Arts and Entertainment
Billie Piper as Brona in Penny Dreadful
tvReview: It’s business as usual in Victorian London. Let’s hope that changes as we get further into the new series spoiler alert
Life and Style
A nurse tends to a recovering patient on a general ward at The Queen Elizabeth Hospital in Birmingham
health
News
Fans take a selfie with Ed Miliband in Kempston, near Bedford, on Tuesday
election 2015
Arts and Entertainment
No Offence
tvReview: No Offence has characters who are larger than life and yet somehow completely true to life at the same time spoiler alert
News
Chuck Norris pictured in 1996
people
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power