British business confidence stabilized at “just below neutral” in May, with executives fearful that the shocks roiling the economy are far from over, a survey found.
(Bloomberg) — British business confidence stabilized at “just below neutral” in May, with executives fearful that the shocks roiling the economy are far from over, a survey found.
The Institute of Directors said its key gauge of sentiment edged down 1 point to -6, ending five months of increasing optimism. It leaves confidence at levels felt before Russia’s invasion of Ukraine last year.
The findings published Thursday will fuel concerns that a nascent recovery is already losing momentum. Firms remained concerned about labor shortages, and only a third said they believed inflation had peaked, a figure the IoD called “stubbornly low.”
Some economists are warning that the UK could even fall into recession as faster-than-expected price growth forces the Bank of England to lift interest rates as high as 5.5% this year.
“Our confidence index is now stabilizing at a just-below neutral stance,” said Kitty Ussher, chief economist at the IoD. “Although investment intentions are picking up and our members are broadly planning for growth, it will take a greater sense that the worst is behind us before confidence really starts to lift.”
The survey comes a day after Lloyds Bank Plc reported the first fall in business confidence in three months.
Read more:
- UK Business Confidence Falls for First Time in Three Months
- UK’s Stubbornly High Inflation Fuels Bets for Higher Rates
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