Confidence slumps as economic woes spook businesses

The confidence of businesses has collapsed, according to a new survey of accountants. The UK Business Confidence Monitor (BCM) index has fallen from plus 8.1 in the third quarter of this year to minus 9.7 in recent weeks.

This represents the largest quarterly decline in the index, which is sponsored by the Institute of Chartered Accountants in England and Wales and the financial adviser Grant Thornton, since it began in 2003. The BCM index has been a reliable leading indicator of growth in recent years and this fall implies a 0.2 per cent contraction of the UK economy in the final quarter of 2011.

Confidence fell across all sectors of the economy, according to the survey. The most pessimistic managers were in the property, finance and insurance sectors. There was a fall in sentiment too in all UK regions, with a particular weakening of confidence in London, the South-east and Scotland. According to the survey, more than three-fifths of UK companies are now operating below capacity.

Scott Barnes, the chief executive of Grant Thornton, said: "The extent of negative sentiment in underlying business performance indicators, with confidence dropping across the UK's regions and sectors, is worrying. The slump in consumer demand and the ongoing crisis in the eurozone is taking a toll."

The gloomy picture was reinforced by figures from the Office for National Statistics yesterday which showed that manufacturing output increased by just 0.2 per cent between August and September. This was driven by the growth in the transport equipment industries, followed by an increase in the output of metals products.

But the manufacture of food, beverages and electrical goods contracted. The wider measure of industrial output, which includes oil and gas extraction, saw no change in September. Chris Williamson, the chief economist at Markit, said: "This is a disappointing rate of growth for a sector that was hoped to lead the UK's economic recovery, and growth looks set to weaken further in the final quarter of the year."

The Confederation of British Industry today forecasts that GDP growth will be 0.9 per cent in 2011 and 1.2 per cent in 2012, down from 1.3 per cent and 2.2 per cent respectively.

However, the National Institute of Economic and Social Research estimated yesterday that GDP grew by 0.5 per cent in the three months ending in October. And there is some good news in figures from the British Retail Consortium which show food price inflation slowing as a result of competition.

The BRC-Nielsen Shop Price Index saw a fall from 2.7 per cent annual inflation in September to 2.1 per cent in October, the lowest rate this year. Mike Watkins of Nielsen said: "Food retailers are looking to encourage loyalty of shoppers over the next eight weeks."

Suggested Topics
News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
Travel
travel
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
News
i100This Instagram photo does not prove Russian army is in Ukraine
News
Morrissey pictured in 2013
people
Sport
sportVan Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
filmReview: Sometimes the immersive experience was so good it blurred the line between fiction and reality
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
art
News
i100
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Environment
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
News
people
News
i100  ... he was into holy war way before it was on trend
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

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices