Business confidence across the UK appears to have been hit by the recent credit crisis, a survey by the Institute of Directors has suggested.
Business confidence across the UK appears to have been hit by the recent credit crisis, a survey by the Institute of Directors has suggested.
Just 4% of company bosses are now more optimistic about their firm's prospects, said the body's latest quarterly Business Opinion Survey.
Just 4% of company bosses are now more optimistic about their firm's prospects, said the body's latest quarterly Business Opinion Survey.
This compares with the 24% who said they were more optimistic, as opposed to less so, at the start of August.
This compares with the 24% who said they were more optimistic, as opposed to less so, at the start of August.
More specifically, 15% of bosses said the financial crisis had hit sales.
More specifically, 15% of bosses said the financial crisis had hit sales.
In addition, the proportion of directors stating that their company was performing well, versus those who said it was performing badly, fell to 73% in the latest survey, down from 77% in the August study.
In addition, the proportion of directors stating that their company was performing well, versus those who said it was performing badly, fell to 73% in the latest survey, down from 77% in the August study.
Pretty gloomy
Pretty gloomy
"This is a pretty gloomy survey, with the decline in business confidence worrying," said Graeme Leach, chief economist at the Institute of Directors.
"This is a pretty gloomy survey, with the decline in business confidence worrying," said Graeme Leach, chief economist at the Institute of Directors.
The key question now is whether optimism will bounce back, because if it doesn't, business investment could be hammered Graeme Leach, Institute of Directors
The key question now is whether optimism will bounce back, because if it doesn't, business investment could be hammered Graeme Leach, Institute of Directors
The credit crisis centres on record loan defaults in the US sub-prime mortgage market.
The credit crisis centres on record loan defaults in the US sub-prime mortgage market.
It spread to the wider global banking sector because much of this bad US sub-prime mortgage debt was repackaged into wider debt offerings, which were then resold.
It spread to the wider global banking sector because much of this bad US sub-prime mortgage debt was repackaged into wider debt offerings, which were then resold.
This caused a global credit crunch as banks became less willing to lend to either each other or to companies, pushing up the cost of borrowing.
This caused a global credit crunch as banks became less willing to lend to either each other or to companies, pushing up the cost of borrowing.
"Thankfully, actual business performance remains high," added Mr Leach.
"Thankfully, actual business performance remains high," added Mr Leach.
"Across the whole economy there is a real divide between the actual impact of the financial crisis to date and expectations of what it might bring in the future.
"Across the whole economy there is a real divide between the actual impact of the financial crisis to date and expectations of what it might bring in the future.
"The key question now is whether optimism will bounce back because, if it doesn't, business investment could be hammered."
"The key question now is whether optimism will bounce back because, if it doesn't, business investment could be hammered."
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