Lloyds TSB Financial Markets says business confidence is weaker than last month, according to the latest results from its business barometer.
Only 21 per cent of companies report optimism rather than pessimism, compared to 41 per cent last month, with particular gloom around retailers and small companies.
Manufacturing holds the strongest business balance of 62 per cent, although the last month has shown the steepest fall, even in this sector, of 0.5 per cent.
Distribution companies signal the lowest levels of confidence with a balance of 53 per cent.
Lloyds TSB Financial Markets chief economist Trevor Williams says: This decrease in economic confidence can be attributed to continued concern that interest rates will rise this year after a quarter of remaining stable. There has also been increased business uncertainty relating to high oil prices, the outcome of the Budget and the UK general election.
We expect a mild growth slowdown this year but the economy’s good health looks set to continue. This should be encouraging for British businesses. Companies are in the best financial position for over a decade.