Britain’s small and medium-sized businesses are turning cautiously optimistic on the economy’s prospects, according to a study from Lloyds Bank, in a sign the recent slowdown may have no lasting impact.
The proportion of firms that are confident in the economic outlook outweighed those that are pessimistic by a margin of 28 percentage points, the highest level in five months.
Businesses are even more confident in their own futures.
Retailers are pinning their hopes on a strong Christmas shopping seasonCredit: Jane Barlow/PA
A net balance of 48pc are upbeat on their business prospects, meaning this index has now risen for four consecutive months.
Meanwhile a balance of 23pc anticipate hiring more workers next year – though that level is down from 28pc in November, and is below the study’s long-term average of 29pc.
“Despite a slight increase in overall business confidence, firms continue to remain concerned about the outlook for the economy,” said Hann-Ju Ho, senior economist at Lloyds Bank.
“The results point to the economy continuing to expand in the fourth quarter at a similar pace to recent quarters. However, larger companies reported [the] weakest business prospects as well as the biggest concerns about the impact of Brexit.”
The better performance among small- and mid-sized companies may reflect their more domestic focus, as larger companies are more likely to operate across borders, and so could be more affected by changes in the UK’s border with the EU.
One factor aiding exporting firms, and which may mitigate this impact on larger companies, is the strength of the global economy.
The US economy is growing at its fastest pace since the start of 2015, expanding at an annualised rate of 3.2pc in the third quarter, the latest figures revealed. However, that figure was a touch below the 3.3pc growth that economists had expected.
The Bureau of Economic Analysis said extra government spending and inventory-building helped the acceleration of GDP growth, while a small slowdown in consumption and exports held it back.