Business confidence soars following Tory win

Prime Minister David Cameron
Prime Minister David Cameron
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Business confidence has risen to an eight-month high after the general election result lifted fears of uncertainty, a survey has shown.

But separate data showed that consumer sentiment waned following the poll, which saw the Conservatives win an outright majority.

The Lloyds Bank Business Confidence Barometer said 62 per cent of firms were optimistic, versus 7 per cent who were pessimistic giving a balance of 55 per cent.

It was the highest reading since September for the barometer, which tracks more than 300 firms’ views of their own prospects and the wider economy.

The optimism comes despite the latest figures this week confirming that UK economic growth slowed to 0.3 per cent in the first quarter.

Lloyds Bank commercial banking chief economist Trevor Williams said: “Business confidence has reached an eight-month high, which could be due to a level of uncertainty being removed following the election.

“This high level of confidence points to an acceleration of gross domestic production growth in the second quarter of the year, following a slowdown in the first quarter.”

But a separate survey, the GfK UK Consumer Confidence Index - also conducted in the wake of the election - found that optimism levels slumped by three points to one point in May, as consumers worried over their finances and the overall economy.

It found consumer confidence had fallen in all the key measures covering personal finances, the ability to make major purchases and the state of the economy.

GfK managing director of social research Nick Moon said: “In the short term, this suggests that despite rewarding them with a majority in the House of Commons, the public are not too confident about economic life under the Conservatives.”