UK economic confidence: UK businesses are feeling more optimistic about their financial prospects and the overall economic growth compared to last year according to a recent survey conducted by the Boston Consulting Group. The survey, which gathered responses from 1,500 businesses between January 4 and January 15, echoes the positive trend observed in purchasing managers' index data, indicating the fastest growth in eight months during January.

Although the UK economy experienced a slight recession in the latter half of 2023, Bank of England Governor Andrew Bailey has expressed optimism due to lower inflation rates and expectations of interest rate reductions, contributing to a modest economic recovery.

Raoul Ruparel, Director,  BCG's Centre for Growth, highlighted a burgeoning optimism among business leaders in the UK, with many anticipating maintaining or increasing their workforce and more than half planning to implement price hikes exceeding 6 per cent this year.

According to the survey, 47 per cent of business leaders anticipate improved economic growth by year-end, compared to 37 per cent last year. Moreover, 80 per cent of businesses expressed confidence in their prospects for the coming year, with 50 per cent expecting an increase in profits over the next 12 months.

The primary concerns cited by businesses were high energy prices, worrying 41 per cent of firms, followed by apprehensions about the slowing economy, which was the top concern for 36 per cent of respondents.

With a national election anticipated later in the year, 41 per cent of surveyed businesses identified energy policy as one of the top three priorities for politicians, followed by 33 per cent advocating for changes to business taxation and 21 per cent emphasising employment taxes.

(With Reuters Inputs)