Business confidence unfazed by Euro woes and lower inflation

Chris Papadopoullos
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CONFIDENCE remains high among UK firms, with signs for both output and employment looking positive.

The BDO Optimism Index, compiled by accountants BDO, was 104.6 for October, figures released this morning reveal.

Despite this being marginally lower than September’s 105, it remains above the UK’s long-term average of 100 and marks a significant improvement on October 2013’s score of 101.7.

The BDO output index remained steady at 103.2 in October after Scoring 103.3 in September. The high confidence and output expectations show that firms believe the UK’s strong recovery will continue despite economic malaise in the Eurozone.

The BDO inflation index fell to 96.2 – showing low inflation may be set to continue. Annual headline inflation was just 1.2 per cent in September, below the Bank of England’s two per cent target.

Low inflation can be worrying as it can signal weak demand, but with confidence high it is more likely to be due to positive shocks to the supply side of the economy.

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