Accountants survey says business confidence tumbles

Business confidence has fallen sharply across all sectors of British industry in recent months but a recession is still viewed as unlikely, according to the Institute of Chartered Accountants in England and Wales.

The property, banking, finance and insurance sectors are under most pressure, with property confidence at its lowest level ever recorded, the group's latest quarterly survey of 984 chartered accountants showed.

The overall confidence index declined to -19.7 from -7.2 in the previous quarter and compared to a cyclical peak of +11.5 a year ago.

A reading of +100 would indicate that all respondents are much more confident about future prospects, while -100 would show all were much less confident.

"Nowhere in the UK is business immune to the fall-out from recent issues in the global financial markets. Significant domestic developments such as falling house prices only reinforce the concerns," institute CEO Michael Izza said.

Growth is still predicted for the economy overall, however.

With consumer confidence weakening, there was also a marked decline in optimism in those sectors most reliant on consumer spending, like hotels, catering and retail.

The findings come as new data from ASDA, the supermarket owned by Wal-Mart Stores, also show consumers are increasingly feeling the pinch.

ASDA's monthly income tracker found the average family to be 1 pound a week worse off than a year ago, even though average earnings before tax went up 27 pounds. That is because essentials such as housing, utility bills, transport and some foodstuffs cost 28 pounds more.

The average family's spending on essentials has risen 5.7 percent in the last 12 months, with the biggest increases seen in London, South East England and Wales, where the rise was 5.8 percent, ASDA said.