UK Business Confidence Low
Published / Last Updated on 10/10/2010
by Ashley Clark, Director
Business Trends Optimism Index from BDO fell for the month of August and is expected to continue the fall in September and October as many expect the economy to slow for the remainder of the year.
We are expecting the main Government Spending Cut review next week. Reduced Government contracts for private business as well as redundancy within local and central government will mean there will be billions of less money around.
As a result, we are seeing increased calls for Government to repay debt i.e. buy back more of their Gilts with an expansion of the quantitative easing program to increase the supply of money.
This will mean more money in the economy, which in our opinion, will result in an inflation bubble in a few years.
Expect recession, then inflation and then interest rate increases over the next 5-10 years.
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