Our research is supported by the conversations I have had with members across the country. At the end of last year, the view was that the credit crunch was largely contained to the City of London, the financial services and property sectors.

Now, I hear of orders being delayed, payment terms being extended, capital becoming increasingly difficult to find and companies taking active steps to prepare for harder times ahead.

In my briefing with our economic consultants, I asked if there was any good news. Their answer was two-fold. Firstly, that they felt the UK would escape a recession and that the economy would show some, albeit it marginal growth, in the short term. Secondly, that we don’t have high inflation and unemployment is low – two of the factors that contributed to the economic downturn of the 70s.

Our business confidence monitor is a snapshot of how people feel towards the economy at the moment they’re asked. Their response is influenced by many different factors.

But one thing we have found is that the business confidence monitor does closely track UK GDP. As such, it is an indicator worth studying – one that both the Bank of England and the Treasury have said that they find helpful.

View the business confidence monitor in full

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