Companies say the recovery is back on track

Ben Southwood
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THE ECONOMY’S weak recovery has solid foundations, businesses said in a survey out today, but the same firms are much less optimistic about their own operation.

Businesses’ confidence in the wider economy hit the highest level since April, with 43 per cent of firms reporting confidence in the recovery, and just 26 per cent giving more pessimistic views, in the Lloyds Bank business barometer for October.

But this six-month high comes in contrast to a steep drop in firms’ sentiment surrounding their own prospects. Forty per cent of firms said their prospects were going up over the year – down from 51 per cent in September – while 14 per cent forecasted a worsening situation, leaving a net balance of 26 per cent.

“It is good to see that recent policy measures are having a positive impact on how businesses think the economy is faring, compared with three months ago,” said Lloyds economist Trevor Williams. Williams suggested Eurozone woes might be part of the explanation for the slide in confidence in their own prospects.