UK Business Confidence Falters

The confidence of UK businesses is faltering against the backdrop of protracted and unclear Brexit negotiations, according to the latest Business Trends Report by accountants and business advisers BDO LLP.

 The new report reveals that the BDO Optimism Index—which indicates how firms expect their order books to deliver over the coming six months—has declined to 102.05, from 103.17 in October. It now sits at its lowest level since April this year and is only just above the long-term trend of 100, news outlets reported.

Dip in optimism is also being reflected in BDO’s Output Index, which indicates UK business output in November. The index has fallen a further 0.09 in November to 98.99, below the long-term trend and at its lowest reading in almost two years.

Firms’ outlook for the future is being dampened following a challenging end to the year in which clarity about the UK’s exit from the EU remains unclear, despite the agreement of a deal last Friday, and the Office for Budget Responsibility revised its growth forecast for the UK economy down to 1.4%.

Meanwhile, the British Chambers of Commerce slightly downgraded its three-year outlook for the UK economy Monday, cutting growth expectations from 1.6% to 1.5% in 2017, from 1.2% to 1.1% in 2018, and from 1.4% to 1.3% in 2019.

“Despite pockets of resilience and success, and strong results for some UK firms, the bigger picture is one of slow economic growth amid uncertain trading conditions,” said Adam Marshall, the director general of the BCC.