Business morale springs back

Julian Harris
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BUSINESS confidence jumped to a nine-month high last month according to a survey released this morning, suggesting that the UK has avoided a double dip recession.

And in another positive sign for the economic recovery, a separate study shows that small firms are feeling more upbeat.

Over half of members polled by the Federation of Small Businesses (FSB) expect to grow in the coming 12 months, with morale among small companies rising for the first time in a year.

“The survey shows considerable optimism about the scope for businesses expansion with a third of firms looking to increase capital investment plans,” the FSB said this morning.

Meanwhile a confidence index by the BDO accountants’ group leapt 3.9 points to a score of 98 in February – clearly above the no-change mark of 95 points.

The upturn was the sharpest spike in the index since December 2009.

At the end of last year, the index had slumped to a miserable reading of 91.5, but has bounced back substantially in 2012.

The UK’s biggest sector – services – has seen the most marked improvement, with optimism surging to an index score of 98.3 last month, up from 94.7 in January.

Morale among manufacturers as also improved, the survey revealed.

While inflation concerns have eased slightly, BDO warned that price pressures could still pose a threat to the economic recovery.