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Business confidence 'is bouncing back'

Date Added: 16/04/2013  

A new report has found confidence among businesses in the UK could be bouncing back.

The latest Deloitte CFO Survey discovered more than a third (34 per cent) of chief financial officers (CFOs) now say it is a good time to take risk on to balance sheets.

CFOs' perceptions of macroeconomic and financial uncertainty were shown by the report to have dropped to the lowest level for two-and-a-half years, while the study also found 23 per cent of CFOs now say their business faces a high level of external uncertainty, which is the lowest level for this data since Q2 2011 (21 per cent).

Ian Stewart, chief economist at Deloitte, explained the research conducted by the body shows CFOs believe that the level of economic and financial risk facing their businesses has declined, despite factors such as the "gloomy" coverage around the UK Budget and the crisis in Cyprus.

"Corporate appetite for risk is not far off the peaks seen in early 2011 when Europe looked set for a sustained recovery," he said, adding: "Reduced stress in financial markets, especially in the euro area, has delivered improvements in credit conditions for big UK corporates."

Over two-thirds (69 per cent) of CFOs taking part in the research stated that credit is more readily available, while 60 per cent of the respondents rated credit as cheap and 67 per cent highlighted bank borrowing as an attractive source of lending. These were revealed by Deloitte to be the highest levels recorded since the CFO Survey started in Q3 2007.

Mr Stewart noted that companies in the UK are set to benefit in the coming months and years from a less risky and improving global economic backdrop.

Previous research carried out by BT found business confidence in the UK has been on the rise since the Olympics and the Paralympic Games. Some 58 per cent of respondents to the company's poll stated that they believe they will still feel benefits from the country's hosting of the Games in 2015.

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Posted by Miles Pritchard

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