Business confidence slips

The survey - a monthly snapshot of company views on the outlook for the economy - shows that the number of firms claiming to be more optimistic about economic prospects fell in December. Just over half of businesses (52%) said they were more upbeat than they were three months ago, and a fifth (19%) said they were more pessimistic, resulting in a total balance of 33%. Last month, by way of comparison, two thirds (67%) were more optimistic and 16% were more downbeat - a balance of 51%.

Despite December's fall, the overall balance of firms expecting economic conditions to improve remained at a much higher level than at the end of 2008 and is far above the long run average balance for the survey of 7%.

Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: "Although confidence levels fell back at the end of the year, the context here is critical. Across the board, businesses are now far more optimistic about the economic outlook that than they were twelve months earlier.

"The fact that confidence is not on a smooth upward path is another reminder that the pace of recovery may be gradual and uneven, but it is clear that overall optimism amongst firms is still growing."