Activity is rising but confidence is sinking

David Prosser
Monday 10 October 2011 05:00 EDT
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Two new surveys published today provide conflicting evidence over the state of the economy, with Lloyds Bank suggesting England at least may be seeing some rebound in business activity, while accountant Deloitte says that confidence among finance directors is now at

its lowest level since the recession.

Lloyds' latest purchasing managers' index suggests that while there is little evidence of recovery in employment, business activity picked up in all nine English regions it monitors during September.

The survey is important because it follows a dire report from Lloyds in August when purchasing managers suggested business activity was at its lowest level for two years.

However, John Maltby, group director of Lloyds TSB Commercial, warned against getting carried away. "The latest improvements were weaker than those at the start of the year, reflecting a less favourable economic backdrop and strained business confidence in the wake of the euro area sovereign debt crisis," he said.

Similarly, M a r g a r e t Ewing, a senior partner at Deloitte, said companies were nervous. "The world has become riskier and more uncertain for corporates," she said. "Chief financial officers are responding with a renewed focus on cost control – expectations of a revival in corporate capital spending and hiring are fading."

Deloitte said optimism among CFOs was at its lowest level since the beginning of 2009, when the UK was still mired in recession.

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