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Businesses are reasonably confident but consumers are not

Businesses are reasonably confident but consumers are not

New research from KPMG shows that whilst the majority of UK companies are optimistic about the prospects for the future, the complexity of rules and regulations are still a barrier to growth.

YouGov conducted the survey of more than 500 firms and discovered that 72% of companies think there is an opportunity for their business to grow despite the government’s austerity measures.

56% of businesses are still confident about the general outlook for their company and 47% said overseas opportunities are helping UK firms compete better globally. 26% of the survey’s respondents also reported an increased production capacity.

60% of businesses and limited company contractors said they were concerned how the budget would impact their firm and 52% highlighted the fact that complicated rules and regulations restricted their ability to grow. 43% of business owners are also still concerned that it is hard to access funding from the banks.

KPMG’s head of UK markets, Malcolm Edge, said businesses agree that the government needs to do more to encourage growth. Companies need the assurance that something will be done to reduce bureaucracy and provide support to help companies achieve sustainable growth.

Whilst businesses are generally optimistic, the opposite is true of consumers. The most recent report from Nationwide shows a significant fall on consumer confidence last month.

The chief economist at Nationwide, Robert Gardner, said consumer confidence has now fallen to its lowest level since the institution started its regular survey.

There are many factors that could be contributing to this, he continued. We still have a fragile labour market, high unemployment and a weak growth in salaries. There is little sign of inflation easing and disposable incomes have been hit by rising fuel costs and the increase in VAT. The economic recovery is still sluggish and there was not much positive news last month to boost consumer’s confidence, he concluded.

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