Most UK businesses optimistic about medium-term economic growth: survey

MORE than 60 per cent of British businesses are optimistic about the country’s economic growth in the medium term and their own revenues in the next few years, a survey showed on Monday, challenging some of the gloomy forecasts for the UK economy.

About 61 per cent of over 1,500 business leaders expect economic growth to be “somewhat or significantly better” in 2025, according to the Boston Consulting Group Centre for Growth’s inaugural business survey.

Some 63 per cent also think their revenues will grow over the next three years.

The Bank of England said this month that Britain’s weak productivity growth means the economy can probably only grow by about 0.7 per cent a year in 2024 and 2025 without generating inflationary heat. It also forecast a recession starting in early 2023 and lasting into early 2024.

“It is easy to get downbeat about the UK’s prospects both in the short and medium term but those running our businesses tend to be more optimistic,” Raoul Ruparel, director for the BCG Centre for Growth, said. “UK businesses are undoubtedly feeling squeezed, but they’re still standing.”

Data for the survey was collected between Jan 11 and Feb 2, when the BoE announced its latest interest rate hike and economic forecasts.

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The survey, covering businesses ranging from sole traders to companies with more than £50 million (S$81 million) of annual revenues, also showed executives thought inflation would be persistent this year and 56 per cent said they would continue to increase prices over the next six months.

More than three-quarters of respondents expected their headcount to stay the same or grow over the next 12 months, while 20 per cent thought they would cut staff.

The BoE expects a rise in unemployment to contribute to a fall in inflation which is running at more than 10 per cent. REUTERS