BDO have released their Business Trends report – a monthly poll of polls which this month shows a range of positive indicators for the UK economy in the medium-term.
- A turnaround in business confidence suggests that the UK economy is taking tentative steps towards recovery
- BDO’s Optimism Index, has surpassed the crucial 95.0 mark that indicates growth, with a huge jump of 3.9 points to a reading of 98.0 for February - the highest in nine months.
- The upturn in business confidence is broad-based across services and manufacturing, but is especially marked in the services sector, with optimism increasing to 98.3 in February from 94.7 in January
- In addition, BDO’s Inflation Index fell to 104.0 last month from 105.2 in January
- However, inflationary pressures may yet increase and coupled with the continuing crisis in the eurozone, these risks could yet derail the UK’s economic recovery
BDO believes that to ensure we continue to see progress and positive Q3 growth, the Chancellor should use the upcoming Budget to ensure that the UK remains competitive for businesses - for example, further accelerating the reduction in the main rate of corporation tax.