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UK Confidence, Investment and Growth Up

growthA survey from Lloyds bank, part of the bailed out bank of RBS, has found that business confidence is at its highest level since 1994, a remarkable comeback from the recently passed recession.

Whilst confidence rose across all regions there were some regional divergences, confidence was:

  • Highest in the South West
  • Followed by the North East, Yorkshire, the East Midlands and Eastern England
  • With London below the UK average
  • The North West and Wales the least confident

Most Confident Sectors:

  • Construction
  • Manufacturing
  • Transportation
  • Communications

Least Confident Sectors:

  • Hospitality
  • Leisure

Perhaps illustrating that the core activities of the economy were improving whilst luxury and leisure are still some time away from the same level of buoyancy as conviction trickles through to consumer spending.

The Lloyds ‘confidence’ measure was derived from expectations of profit, recruitment, capital expenditure and investment.

Indeed investment levels increased to pre-recessionary levels, with Q1 2014 delivering business investment 10.6% higher than Q1 2013, marking the fifth consecutive quarter of growth.

The service sector grew 3.1% in the 12 months to April 2014 whilst it is reported that gross domestic product (GDP) eclipsed its 2008 peak in Q1 2014.

Indeed Goldman Sachs, the US investment bank has upgraded its predictions for UK economic growth in 2014 to 3.4% from 3% and expects further growth of 3% in 2015 (up from 2.7%) whilst unemployment is forecast to fall to 5.8% by 2016.

Of course the economists have been wrong before and it will be the sentiment and reality of the experience of SMEs that will bear out these forecasts but for now there is real hope that the UK economy has truly turned the corner.

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