Business confidence drops in Q3

More than 40 per cent of firms feel red tape is strangling business

Business confidence hit a new low in the third quarter of 2011, according to a joint report released today.

The report, by the Institute of Chartered Accountants in England and Wales (ICAEW) and Grant Thornton, also says more firms than before (over 40 per cent) feel red tape and regulation are strangling businesses.

The UK Business Confidence Monitor showed that in Q3 2011, the positive trend for financial performance among businesses has weakened, with the confidence index standing at 8.1, down from 13.7 in Q2 and the lowest level since Q3 2009 when the UK was in the grip of recession.

Firms have also revised down their expectations for turnover and growth over the next 12 months.

Michael Izza, chief executive of the ICAEW, said: “Businesses are doing their best to grow the economy in a tough climate, but they feel little progress has been made on tackling regulation and improving tax competitiveness.”