UK firms upbeat about new year

British firms are more confident about their prospects than at any time in the past two years and hopeful of a revival in their fortunes next year, according to a new report today.

A survey of 1,700 UK companies by Lloyds TSB showed that expectations for sales and orders have started to recover, leaving businesses expecting improved profits over the next few months.

Despite the brighter outlook, firms were still wary about investing, with one in four fearing they will have to make cuts.

John Maltby, managing director of Lloyds TSB Commercial, said: "There are still many question marks over the likely strength and shape of the recovery, but confidence is the bedrock of every economy, and with businesses now more optimistic about their prospects for the year ahead, there is good reason to be hopeful that the upturn will gather pace early in 2010.

"That's not to say that it will be a smooth ride. Businesses may be more upbeat overall but they are still wary about the future, having experienced such a turbulent time over the past year.

"The next six months will be critical, and the path to recovery will depend on businesses' approach to investing, recruiting and exploring new markets."