Research undertaken by the Confederation of British Industry has revealed a sharp fall in business confidence during the months since August 2011. UK businesses are looking at investment for the future, as business leaders lose confidence in the economy.
The research revealed that 70 percent of the 122 businesses leaders interviewed were less positive about the future than they were in August this year. Recruitment has been frozen and in some instances, staff made redundant by 40 percent of businesses. Speaking on the 20th November, the day before the CBI annual conference, John Cridland said that 2011 had contained “disappointed expectations”, with UK businesses facing the Eurozone crisis in addition to other problems.
Although Cridland supports the deficit reduction plan, he is looking for a “Plan A Plus” to be revealed by the chancellor in his Autumn Statement. He said:
“The chancellor has to announce plans for growth and the government needs to do more of the heavy lifting which is needed. There is no support for additional public spending because we think that would reduce growth rather than enhance it.”
The reasons provided by the respondents are slow growth of the economy, unstable financial markets, a reduction in customer demand and the Eurozone crisis. Despite the drop in confidence levels, 80 percent of business leaders show support for the deficit reduction strategy. According to a spokesman for the Treasury, the plans in place to reduce the deficit have kept interest rates low, and will create long term stability for the UK.
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