Business loan customers told about corporate confidence fall

Mon, 18 Jun 2007

Confidence in the state of the UK economy fell last month, according to a new study that may be of interest to a number of business loan customers.

Research from financial services provider Lloyds TSB Corporate Markets has discovered that 46 per cent of companies agreed with the statement in May 2007 that they are more confident about the UK's economic outlook than in the preceding quarter.

To put this into context, 55 per cent agreed with the assertion in the preceding month.

Meanwhile, 26 per cent confessed that they felt more pessimistic about the economic situation, up from 14 per cent in April.

"Firms are clearly feeling jittery about the chance of interest rates rising above six per cent and the resulting downward pressure on their profits," commented Trevor Williams, chief economist at Lloyds TSB Corporate Markets.

Company bosses who suspect that interest rates will rise further in 2007 may wish to consider arranging fixed-rate business loans.

This is because customers with variable-rate business loans may find their monthly repayments increasing in line with each base rate hike.

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