UK business confidence crashes on coronavirus hit: Lloyds

(C) Reuters. FILE PHOTO: People look out onto the Canary Wharf district as they walk through Greenwich Park in London

LONDON (Reuters) – Confidence among British companies slumped in the second week of March as the coronavirus crisis gathered pace but before the government shut much of the economy to slow its spread, according to a survey published on Tuesday.

The business confidence index from Lloyds (LON:LLOY) Bank hit its joint lowest level since the depths of the global financial crisis 11 years ago in the week that started on March 9, touching -3%.

During that week, the Bank of England cut interest rates and finance minister Rishi Sunak said he would ramp up public spending. Both measures proved to be just the prelude to further emergency stimulus moves by the BoE and the government.

Over the first two weeks of March combined, confidence amongst companies sank by 17 points to 6% and hiring intentions fell 12 points to 4%, Lloyds said.

More than 70% of businesses said they were or would be affected by coronavirus.

Separately on Tuesday, market research firm GfK said its index of consumer confidence — which was also conducted in the first half of March — slipped to -7 from -9 in February, which had been its strongest level since August 2018.

“While we have a long way to drop before we match the devastating numbers seen in July 2008 when the Overall Index Score crashed to -39 points, lockdown Britain can only expect further deterioration,” Joe Staton, GfK’s client strategy director, said.

Gfk reported a sharp, eight-point fall in willingness of consumers to make major purchases.

The Lloyds survey was conducted between March 2 and March 16 and involved 1,200 companies.

The GfK survey of 2,000 people was conducted between March 2 and March 13 for the European Commission.