"In spite of a strengthening labour market, business confidence continues to weaken, and improved hiring intentions are not translating into growth plans"
- Peter Hemington, a BDO partner
Confidence among U.K. businesses has gone down to the lowest level in over two decades in January, adding to concerns that the economy still struggles to gain the momentum in the first quarter of 2013. According to the accountancy firm BDO, its gauge of business confidence dropped to 88.9 last month, down from 90.3 in December, well below the score of 95 needed to indicate growth. As the reading reached the lowest level since the survey was launched in 1992, it is expected that businesses are becoming used to the lack of sustained growth in the UK economy. BDO's Optimism Index fell even despite some improvement in the labour market and the construction sector.
"In spite of a strengthening labour market, business confidence continues to weaken, and improved hiring intentions are not translating into growth plans. It seems the damaging effects on businesses of five years' zigzagging economic growth has left them wary of making concrete plans for expansion and resigned to the ‘new normal' of economic stagnation," said Peter Hemington, a BDO partner.
"To end this cycle, it is imperative that the government implements plans to expedite growth," he added.
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