Legatum, CBI and ICAEW surveys shed light on UK business climate

A report has concluded that low start-up costs and a favourable climate for entrepreneurs have made the UK the best country in the EU in which to start a business. The Legatum Institute described the UK as 'extremely entrepreneur-friendly' in its annual Prosperity Index. 'At ... around £66, the UK is the third cheapest place in the world to start a business, far cheaper than the US or Germany,' it said. The relative success of Britain's economy was cited as a key factor in helping it maintain its position as one the world's most prosperous countries. Legatum's prosperity index listed the UK as the 15th most prosperous country in the world, just behind Germany and the US, but ahead of Austria, Singapore and Japan. But the news comes at a time when there are signs of a possible softening in the UK economy. A survey of SME manufacturers by the CBI has found orders falling faster than at any time since early 2013. Export orders are particularly weak, with 46% of respondents reporting a fall, against just 10% with a rise. Rain Newton-Smith, CBI director of economics, said: 'As demand has fallen, especially in the face of a strengthening pound, our smaller manufacturers have had a tough quarter, with orders and output volumes dropping.' Business confidence is also seen weakening in another survey by the Institute of Chartered Accountants in England and Wales and Grant Thornton. Its index now stands at 15.6, seven points down from its summer reading and well below the peak of 37.3 reached in 2014. Stephen Ibbotson, ICAEW director of business, said: 'Although business confidence remains in positive territory, a number of factors cannot be ignored. Business investment is muted, skills shortages are becoming more of a challenge and staff and salary increases for 2016 are lower than for the last 12 months and the outlook for exports remains poor.' The survey found that lower confidence will result in neither capital investment nor employment rising over the next 12 months.

 

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