Monday 4th December 2006
A study by Lloyds TSB has found a high level of confidence in the business banking market.
The banks monthly business barometer, published today, saw an 18 per cent increase in the number of companies who were optimistic about the market in general despite the recent increase of the Bank of Englands base rate.
Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "UK firms saw this latest interest rate rise coming, which could explain why it hasnt made a dent in their outlook."
However, he noted the possible impact of passing this confidence on to employees in the form of wage increases.
"If there is evidence this is happening, it may increase the Banks willingness to raise rates beyond their current level," he claimed.
Among the service industry, 73 per cent of companies said they expect an increase in business activity, representing the most confident sector.
Meanwhile, Mr Williams anticipated a continued recovery for the manufacturing industries throughout 2007.
Lloyds TSB says it provides business banking solutions for firms with an annual turnover of up to £2 million.
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