Business confidence declined for the second consecutive quarter to a two-year low, in line with the gloomier outlook for the economy predicted by the Bank of England last week, according to the latest Business Confidence Monitor (BCM) from the Institute of Chartered Accountants in England and Wales (ICAEW), reports The Independent.
The continuing credit squeeze, higher interest rates since August last year, and a slowing housing market have caused finance professionals to become pessimistic about business prospects for the coming 12 months.
The downbeat mood extends across sectors, regions and business size, despite the fact that the economy is still growing at around 3% a year.
Michael Izza, the chief executive of the ICAEW, said: “The current divergence between the Business Confidence Index and economic growth is likely reflecting a turning point for the economy.
“Although it is too early to judge the full impact of financial turbulence and tighter credit conditions on the real economy, a slowdown in the UK is on the horizon.
“The events of the end of August and early September such as the run on Northern Rock has had a significant impact on business confidence.
“A probable recession in the US and a slowdown in the eurozone will only exacerbate the slowdown.”
THE MULTI-BILLION-POUND London offices market is set for further price falls as evidence emerges that big banks have put their requirements for large new lettings on hold for up to a year and are opting for short-term flexible leases, reports The Times.
The findings emerge from a survey carried out by MWB Business Exchange, an AIM-listed company with 25 serviced office buildings in the City, West End and Canary Wharf.
Banks and financial services companies have taken up to 80% more flexible lease contracts between July and October than the third quarter a year ago, when the occupier market was healthy.
Previously it has been more usual for banks to sign up to ten to twenty-year leases. The average term for the short flexi-leases has doubled to about 18 months.
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