Report suggests return in business confidence

CONFIDENCE is slowly returning to the UK as firms accept the realities of recession.

That’s according to a new report by business advisory firm BDO Stoy Hayward, which suggests that firms’ optimism is recovering as they adapt to the new economic regime.

It said that its findings were encouraging, although it warned that it was too early to say whether confidence had slumped to its lowest level.

Moreover, job losses are still expected with around 320,000 expected to go in the next three months.

And in another report by accountants KPMG, confidence is still at a low ebb with more than 80% of firms describing the economuic climate as bad or very bad – a rise of 21% since December.

Its research suggested that only one in 10 firms felt that the economy had reached its lowest point.

Despite its gloomy findings, the study also indicated a “faint glimmer of optimism”. Two thirds of respondents said they believed that the crisis would be over by 2011 although 16% predicted that the recession would last for more than two years.

KPMG’s head of markets in the UK, Malcolm Edge said that the firm was asking its clients to consider more extreme situations that ever before.

“We’re asking what would happen to your business if your sales fell by 50% or what if your biggest supplier became insolvent?” he said.

“Some of our clients may think we are being overly dramatic, but in fact we are only asking them to model scenarios that are actually happening across the marketplace.”