According to latest figures released in polls across the UK, confidence is dropping fast in the UK’s ability to forestall a second recession and pessimism is gripping businesses and boardrooms throughout Britain. This is attributed to three different and very dismal surveys that were released today.
Of particular note is the index released by Regus in that Britain came in at the absolute bottom of global confidence in their business index. Optimism is at an all time low in both the service and manufacturing sectors according to a second survey conducted by BDO accountants whilst the third survey by Deloitte business advisers said that as many as 43% of companies believe the UK is preparing for a second (double dip) recession.
Businesses are not showing any comfort in the fact that the Bank of England is set to release another £75 billion into the economy but the surveys do show that businesses are starting to lobby government to be more proactive, more adventurous.
The number of finance directors who now believe a double dip recession is imminent is up by 10% to 43% when just a few months ago that number was 33%. Fewer are ready to take any risk and according to Deloitte, more and more businesses are opting to be defensive rather than on the offense when looking at strategies for growth and balancing their budgets.
Companies are taking a ‘back seat’ approach to investing and acquisitions and are being overly cautious in terms of overseas investments and unnecessary expenses here at home. Another report altogether, from Investec, found that companies are even going so far as to ‘hoard cash’ because of the extreme uncertainty and volatility of the economy.
The bottom line is that growing numbers of businesses are indeed preparing for a double dip recession. They believe it is imminent but just how soon is anyone’s guess.