Resurgent Eurozone crisis drags down UK business confidence

Tim Wallace
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BUSINESS confidence fell sharply in May as worries grew over the impact of the ongoing Greek and Eurozone sovereign debt crisis, survey data showed today.

Firms’ confidence in the country’s economic prospects fell 47 points from a net balance of 26 per cent to minus 21 per cent, Lloyds’ business barometer showed.

The share of positive firms fell from 48 per cent to 22 per cent, while the share of those that were negative on the economy jumped from 22 per cent to 43 per cent.

Firms’ confidence in their own trading prospects dropped back, but remained positive – a net balance of 35 per cent expect to see an improvement in the next year, down from 43 per cent in April and 40 per cent in March.

“The renewed concern around the Eurozone is clearly having an impact on businesses’ sentiment towards prospects for the UK economy and, to a lesser extent, to their own prospects,” said Lloyds’ economist Trevor Williams.

“Despite this, our model still points to a return to positive underlying growth in this quarter.”