British businesses believe the country could be headed for a double-dip recession, according to a survey from accountants and business advisors BDO LLP.
BDO's optimism index – which reflects how businesses expect trading to develop two quarters ahead – tumbled to 93.1 in August from 95.5 in July, reaching levels not seen since the deepest parts of the recession between November 2008 and July 2009.
BDO Partner Peter Hemington said: "If Quarter 4 does indeed turn out to be the start of a double dip, it certainly won't be a merry Christmas for UK businesses.
"What's so disappointing is that businesses seem to be convincing themselves that things are going to get really tough in 2011 and are deferring new hires and investment decisions as a result. Much of this comes from the hype around the government's spending cuts."
BDO's index is compiled from the UK's main business surveys, which covers more than 11,000 respondents from companies employing about five million people.
City A.M. Reporter