Firms positive about future despite credit crunch

British business is confident despite global economic pressures such as the credit crunch and rising oil prices, a report said today.

The study, by accountants BDO Stoy Hayward, shows UK businesses expect the economy to continue to grow by between 2.5% and 2.75% over the next six months.

While confidence remains “robust”, it says there are signs that firms are feeling the pressure.

The BDO Output Index, which predicts business confidence one quarter ahead, fell slightly in November and the BDO Optimism Index, which measures business confidence two quarters ahead, has hit a two-year low.

Peter Hemington, partner at BDO Stoy Hayward, said: “Despite fears about the impact of the credit crunch, the rising cost of oil and a weakening of consumer demand, UK business remains defiantly positive about the future.

“As a result, given that inflationary expectations remain strong, we suspect the (Bank of England’s) Monetary Policy Committee will hold rather than cut interest rates this month.

“However, optimism is clearly decreasing. If this trend continues we will surely see the rate of growth of the economy falling as we move further into 2008.”