Optimism about the UK economy drove business confidence up for November
Business confidence increased in November, as political turbulence around the Brexit vote has contributed to a volatile climate for companies, according to a new survey.
UK businesses saw a two-point increase to 111.1 in November, according to an index compiled by YouGov and the Centre for Economics and Business Research (Cebr). A score of above 100 represents net positive sentiment.
An increase in economic optimism explained much of the rise, while capital investment planned for 2017 also increased.
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Confidence has grown since a steep post-referendum fall, although an October fall to 109.1 arrested an otherwise steady upward movement.
The June survey result recorded a score of 112.6, before a Brexit vote dip to 105.0 in July.
The survey findings reflect a similar measure of business optimism from the CBI, which showed a sharp fall in the second quarter, before a quick rise to levels recorded before the vote to leave the EU. However, the outlook is decidedly mixed, with other surveys showing economic pessimism.
UK GDP has seemingly ridden out any post-referendum shock, surprising economists with 0.5 per cent growth in the third quarter of 2016. Meanwhile, the purchasing managers’ index (PMI) for UK services shows a steady increase in business confidence since the referendum.
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Scott Corfe, director at the Cebr, said: “To date, businesses are proving quite resilient in the face of what has proved to be an economically and politically tumultuous six months for the UK.
“Although many forecasts believe growth will slow next year, organisations themselves have a relatively bright outlook and are prepared to invest over the coming 12 months,” he added.
Tom Rees, director of YouGov Reports, said: “A large part of the improvement is driven by businesses becoming more optimistic again about the prospects for the UK economy over the next year and a decrease in pessimism about their own organisations.
“However, despite these gains the numbers are still not back to pre-vote levels,” he added.