BUSINESS confidence in Scotland fell three points during October to 4% despite forecasts of staff increases, according to the latest Bank of Scotland Business Barometer.
A net balance of 9% of Scottish firms now say they are pessimistic about the economy, compared with a month ago, when a balance of 1% said they were optimistic.
The UK’s exit from the European Union was having a negative impact on expectations for business activity for a net balance of 28% of Scottish companies, an increase of 22 points on a month ago.
However, a net balance of 13% expect to hire more staff in the next year, up seven points on last month, while firms in Scotland reported higher confidence in their business prospects at 18%, up five points.
Across the UK, overall confidence fell 10 points to 19%, its sharpest fall and its lowest level all year, as firms’ optimism about the economy slumped 18 points to just 8%. Confidence in their own business prospects fell three points to 29%.
Fraser Sime, director, SME banking, Bank of Scotland, said: “Ongoing uncertainty appears to be weighing heavily on firms’ optimism for the economy across the UK.
“However, it’s slightly more encouraging to see firms reporting growing confidence in their own business prospects and an increase in hiring intentions. This suggests a resilience that may prove to be valuable as companies await greater clarity on the UK’s future trading relationship.”
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