Business confidence falls

The latest Lloyds TSB Corporate Markets Business Barometer posted a year low in confidence about the economy, and increased pessimism about its prospects. The number of firms surveyed expressing optimism about the economy fell from 55 per cent in April to 46 per cent last month. Those expressing pessimism rose from 14 to 26 per cent over the same period.

Just 20 per cent of firms were more rather than less optimistic about the economic outlook. Lloyds TSB Corporate Markets chief economist Trevor Williams said firms were concerned about further interest rate rises damaging their profits. An SMMT spokesman said that interest rate rise fears were seen by the car industry as one driver for May's year-on-year 2.2 per cent fall back in new vehicle sales but added year- to-date sales had increased by 2 per cent. “This is only the second decline in the year, and we don't see any clear signs of problems, just a slight hesitation at this stage,” he said.