UK business optimism on a low, says report

07/01/08 17:41

Levels of optimism among UK businesses are falling dramatically, according to a new report by financial advisor Grant Thornton.

Having researched almost 8,000 companies in 34 countries, Grant Thornton has found that the current level of optimism in the UK has dropped to just 14%, from 43% in 2007.

The result is the lowest since 2006, when businesses faced concerns following the London bombings. The figures are also below those in the US, which recorded an optimism level of 22%.

The global average currently stands at 42%, and the EU average is 32%.

"The US is currently experiencing a greater fall-out from the credit crunch than the UK, yet businesses there are more confident about the year ahead than we are,” said Alysoun Stewart, head of strategic services at Grant Thornton.

“If the US can be positive about withstanding the effects of the credit crunch, then so can we. In fact, US optimism levels have increased by 8% over the past year.”

With the economic climate in a state of uncertainty, almost three quarters (70%) of businesses have blamed it for their negative outlook for the future. A further quarter (24%) have blamed the political situation and 21% identified the government’s monetary policy and interest rates as being at the root of the problem.

“While no-one is suggesting that 2008 is going to be a walk in the park, businesses still need to be cautious that they don't end up talking the country into a recession," she warns. "We need to cast aside our negative attitudes and focus on solutions rather than the problems.”