Outlook dims for UK execs

LONDON - Confidence among senior executives at Britain's largest companies has declined in recent months despite improvements in the economic and trading environment, a report from accountant Deloitte warns.

The sentiment was not, however, held by businesses in the wider market, according to a rival survey, which found optimism had risen in March.

Deloitte's survey of chief financial officers at Britain's largest 250 companies reveals that businesses believe that there is a one in three chance of the economy sliding back into recession, as well as widespread anxiety that a hung parliament following the election could damage a sustained economic recovery.

Four in five of the executives said they expected the recovery to be sluggish, while warning that there was a 33 per cent chance of further quarterly declines in GDP - the so-called double-dip.

The state of the country's public finances continues to be the biggest worry for many.

But a survey by rival accountant BDO showed optimism was at its highest level for two years.

BDO's Optimism Index jumped from 99.4 to 103.2 in March, a level not seen since the summer of 2006. Its output index has also reached its highest level since the third quarter of 2007.

A rise in the output index, which measures short-term turnover expectations, means companies are re-stocking, providing a boost to business' order books.

But, BDO said, while this is encouraging, growing inventory levels will provide only a temporary crutch for economic growth.

- INDEPENDENT