Business leaders’ confidence in the economy ‘fell off a cliff’ in September as supply shortages, an energy crisis and fuel chaos drove up prices.
Company directors are more pessimistic about the future than at any time since early February, at the height of the third lockdown, according to a survey from the Institute of Directors.
Kitty Ussher, chief economist at the IoD, said: ‘The business environment has deteriorated dramatically in recent weeks.
Corporate gloom: Company directors are more pessimistic about the future than at any time since the height of the third lockdown, according to a survey from the Institute of Directors
‘Following a period of optimism in the early summer, people running small and medium sized businesses across the UK are now far less certain about the overall economic situation. Confidence fell off a cliff in September.’
Data from the Office for National Statistics (ONS) showed last year’s slump was less severe than first thought, making it the worst recession in 100 years rather than 300.
Output tumbled by 9.7 per cent – less than the 9.8 per cent initially pencilled in – and the economy is 3.3 per cent smaller than it was pre-pandemic, better than the 4.4 per cent first thought.
This has prompted speculation that the Bank of England might now be more likely to raise interest rates earlier than expected.
But the Bank of England has been wary of lifting rates from their record low of 0.1 per cent too soon, and slowing the economic recovery.