Small rise in UK business confidence in August

There was a small rise in business confidence in August, according to the latest optimism index from BDO.

The index rose from 95.1 to 95.5, which is still a low figure, suggesting the economy will barely grow.

The index is an average of several different surveys of confidence and business climate.

The output index, which measures businesses' predictions about their turnover, fell to 93.6 from 95.0 in July - its lowest since June 2009.

"It's worrying to see such a reliable growth indicator fall to a two-year low," said Peter Hemington, a partner at BDO and long-time advocate of further quantitative easing.

"Our predictions should serve as a wake-up call to policymakers that action must be taken to avoid economic contraction."

Weak output

The manufacturing sector had particularly weak output expectations, with an index of 93.0, which was the weakest since July 2009.

BDO said that weak demand at home and the cooling global economy had stymied growth in the sector.

There was some better news on expectations of inflation, which showed its first monthly fall since December 2010, although it remained 7.9% higher that the same month a year ago.

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