Companies tighten their belts with a view to a possible recession.
Businesses plan to reduce their expenditure on capital investment as the UK economic outlook stays gloomy.
This is a finding of the Institute of Chartered Accountants (ICAEW) in England and Wales. It states that firms are also making cuts in terms of job creation.
The ICAEW/Grant Thornton business confidence monitor highlights a negative outlook, at -9.3 in the third quarter as against +8.1 a year earlier.
This all indicates that the UK is returning to a recession.
The National Institute of Economic and Social Research has asserted that the government ought to temporarily ease on its spending cuts to promote growth.
There could be another double dip recession.
The chartered accountants’ organisation continued so say that nearly a fifth of UK businesses have above normal stock levels. This is most likely due to insufficient customer demand and more than half the businesses are operating under capacity.
Pay expectations for 2012 are low as businesses forecast slight increases of up to 2 per cent.
This is a time in the UK when we all welcome business growth.