Prospects 'Very Bad' According to Two-Thirds of Executives; SURVEYS

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Byline: By John Cranage Business Staff

Confidence among British businesses has plummeted to a record low in the wake of the escalating global economic crisis.

Nearly two thirds (60 per cent) of senior executives now view their company's prospects as "very bad", according to KMG's quarterly National Business Confidence Survey published today.

Only a third of respondents were as negative as that when the last survey took place in May.

This time, a further 47 per cent believe that the UK economy is already in recession, while 86 per cent say that the credit crunch has had a negative impact on their organisation.

The number of firms considering making job cuts in response to the dire economic climate has also increased over the summer, leaping from 53 per cent at the end of Q2 to 62 per cent at the end of Q3 2008.

Mel Egglenton, senior partner of KPMG in Birmingham, said last night: "The results of our latest Business Barometer are truly the bleakest we've ever seen - and no small wonder.

"The past month has been one of unprecedented turmoil in the financial markets, with each day bringing yet another extraordinary development that, even in isolation, would have seemed astonishing twelve months ago.

"This rapid pace of events has undoubtedly spooked British business, leaving many business leaders wondering, 'what next?'.

"Back in May, only one business in ten thought that a full-blown recession was on the cards. Yet three months down the line, almost half of all businesses think that this recession is now upon us.

Couple this with the fact that the vast majority believe that the economic outlook will only get worse before it gets better, and it's hard to see anything other than a gloomy winter ahead for the nation's businesses."

Ironically, despite the prospect of spiralling redundancies, more than half the companies questioned by KPMG said the plan to reward remaining staff with wage rises ranging from three per cent to ten percent. …