UK Leads EU in Business Confidence Despite Drop to Record Low

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British businesses are more confident about the future than their European counterparts, despite an index of optimism plunging to a record low.

The net balance measuring whether UK companies expect activity to increase fell last month. It is still higher than elsewhere in the European Union or other places in the world.

The bleaker outlook is caused by a surge in inflation which reached the highest level in four decades in the UK. Businesses in the UK have become used to dealing with uncertain outlooks, which is why confidence is still holding up.

Business confidence has been adversely affected by inflation and economic uncertainty. The resilience of UK business leaders may explain why they are more optimistic than other countries.

It is the first time in the history of the survey that most companies think profits will fall. Higher costs are expected to be passed on to customers.