Firms brimming with optimism for year ahead

OUTPUT and optimism are on the rise among UK businesses, suggesting that growth will strengthen further in 2014, according to an international accountancy firm.

BDO’s latest optimism index, released today, shows particularly strong confidence among manufacturers, but with positive sentiment growing in the services sector too.

The headline figure of the index reached 101.7 last month, up from 100.7 in September. Anything over 100 indicates growth above the economy’s long-term trend. The end of recession in the Eurozone is also boosting British output, with a better climate for exporters.

BDO’s Peter Hemington said the recent burst of economic growth would give chancellor George Osborne some extra flexibility: “Recent measures have prompted recovery on the demand side of the economy, but the chancellor risks bottlenecking growth unless he turns his attention to unlocking the supply side.”

BDO added that if the recent upturn continued to benefit UK firms, the economy could grow by 2.7 per cent next year, as forecast by the Centre for Economics and Business Research (CEBR).