Confidence takes a fresh dive

BUSINESS confidence has dropped yet again, and there's unlikely to be any help through an early cut in interest rates.

The latest survey conducted by the CBI and Experian reveals confidence falling in 10 of the UK's 12 regions. In Northern Ireland and the South-East of England - the only regions to see rises - firms expecting an improvement only just exceed those forecasting a fall.

Wales saw the sharpest drop with pessimists now outweighing optimists by more than two to one.

Businesses are also expecting the loss of 38,000 jobs in the next three months. And with most reporting excess capacity, only the North-East and the North-West plan to increase investment in plant and machinery.

Despite the trends, the Bank of England's Monetary Policy Committee is still likely to hold interest rates at 3.5% on Thursday. It would like to help manufacturers. But another cut would fuel consumer borrowing - up by a record £9.97bn in June.

The CBI's survey also contained some good news. For the first time in 15 months, more than half of the UK regions expect export orders to rise, with optimism strongest in the North-West and Wales.

Experian associate business director Peter Gutmann is not convinced. 'Similar optimism a year ago proved to be a false dawn,' he said. The fall in sterling and signs of a global upturn are encouraging, he added.