UK business confidence has tumbled to its lowest level since 2009, a survey showed on Monday.
According to the latest Accenture S&P Global UK Business Outlook, the headline index fell 10%, with a net balance of just 18% of surveyed firms now expecting activity to increase over the next 12 months. That compares to net balances of 28% in June, and 56% in February.
Inflationary pressures remain severe, with 80% of firms expecting to increase salaries in response to the cost-of-living crisis and tight labour market.
Selling prices were also forecast to rise sharply, although not quickly enough to offset a negative outlook for profits. In total, a balance of -13% of firms are forecasting lower earnings over the next year.
Employment was still expected to rise, however, although hiring intentions are at a two-year low.
Simon Eaves, market unit lead for Accenture in the UK and Ireland, said: “As we head towards what is likely to be a tough winter for the UK economy, business confidence has understandably been shaken.
“However, many British companies continue to demonstrate resilience in the face of economic difficulties: hiring plans remain positive, and overall optimism, while muted, is higher than of our European counterparts.”
The Accenture S&P Global UK Business Outlook is based on responses from a panel of around 1,400 companies in the manufacturing, services and construction sectors. Data for the latest survey were collected between 12 and 28 October.
