BUSINESS sentiment held onto its October gains in November, according to a survey out today, despite worries the economy will post negative growth in the fourth quarter.
Some 42 per cent of firms said they were more optimistic about the UK economy in November than they had been three months before, the Lloyds Business Barometer showed, compared to a quarter saying they were less optimistic – leaving a net balance of plus 17 per cent, the same as in October.
But after four improvements in the barometer in the last five months, the result left Lloyds Banking Group chief economist Trevor Williams cold. “The latest results from our survey reaffirm that underlying economic growth remains broadly flat,” Williams said. “The recent pick-up in inflation and an unwinding of Olympics-related spending suggest a somewhat weaker economic performance in the fourth quarter.” But he suggested that the continued strength in the labour market, combined with an improving credit market, could provide the grounding for an improvement next year.
The report also included data on firms’ views on their own prospects. Ninety-two per cent of firms said they expected their trading situation to stay the same or improve in the next year, versus eight per cent who thought it would worsen.