Business Confidence Down for 2008

Research from the Brtish Chambers of Commerce has revealed a less than favourable outlook from UK Business for the year ahead. Compared to last year, there is less confidence in both the economy and in the government’s ability to manage the country’s economy.

When asked:

“How do you think the British economy will fare over the next year compared to 2007?”

75% of business answered "Worse than 2007". Only 8% of respondants expected a better outlook.

On a global scale, when asked the question:

“How do you think the World economy will fare over next year compared to 2007?”

The result was almost identical; 74% of respondants said "Worse than 2007" whereas 9% expected a better economic outlook.

As for how the new Gordon Brown government is perceived by UK small business, Alistair Darling’s first pre-budget report, where he made overtures to simplify the tax system by abolishing taper relief for Capital Gains Tax, seems to have backfired already. Not only did it incur the ire of the CBI but 75% of business questioned said they were less confident in the government’s ability to manage the economy. Only 3% had more confidence.

The Brown/Darling double-act only garenered 19% of the vote when business was asked

“If Britain’s economy were to face significant problems in the months or years ahead, who would you trust most to deal with it in the best interest of Britain?”

Yet the David Cameron/George Osborne duo received a 40% backing, effectively putting twice as much confidence in their ability to run the country. 30% of respondents said that neither the current Labour nor Tory leadership was their choice to take Britain forward economically. The handlling of the Northern Rock bank run seems also to have affected business’s dim view of government.

Costs also play an important part in business and 86% of business expect prices to go up with 78% expecting inflationary pressures to increase.

Reacting to the results, David Frost, Director General of the British Chambers of Commerce, said:

“2008 is set to be a challenging year." adding that "The reaction to the proposed Capital Gains Tax changes has been extremely negative and has undermined much of the good work that has been done by the Government in promoting an enterprise economy.”

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