Businesses in UK plan to cut capital investment spending: Survey

With UK's economic outlook continuing to look weak, businesses are planning to cut capital investment spending according to a new survey.

The UK Business Confidence Monitor index, produced by the Institute of Chartered Accountants in England and Wales (ICAEW), in association with the accountancy firm Grant Thornton, showed the number of firms expecting to hike their capacities over the next year has declined nationwide.

Firms in the East Midlands, the North West and also the South West expected to see significant reduction in spending expectations. The survey further revealed that around 20 per cent of the firms had stock levels above normal, pointing to low levels of customer demand.

The overall confidence index improved, rising to -9.3, up from -9.7 in the three months of 2011.

However, confidence still remained below the +8.1 seen in the third quarter of last year.

According to Michael Izza, chief executive of ICAEW, the survey showed that businesses were responding to concerns about the economic outlook by cutting back on investment in equipment and people.