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Businesses in the UK were among the least optimistic in the world in the second quarter of 2011, finds research.

Levels of optimism in UK companies suffered a 9 per cent decrease in optimism year on year, and a 14 per cent decrease since Q1 2011, according to the International Business Report by Grant Thornton, which provides insight into the views and expectations of more than 11,000 businesses per year across 39 economies.

Business optimism in the UK is higher only than in Greece, Japan and Spain, countries which are feeling the effects of severe environmental or financial upheaval.

This downturn in optimism is linked to concerns about the strength of the UK economy, spurred on by falling consumer spending, the recent collapse of high-profile retailers and weak bank lending.

UK businesses also expect to see lower profitability, less investment in both plant and machinery and research and development than in 2010, says Grant Thornton.

However, UK businesses expect to see a modest 4 per cent growth in revenue and a 7 per cent growth in workforce over the next year. Furthermore, 53 per cent of UK businesses expect to offer employees a pay rise in the next 12 months, a 6 per cent increase in comparison to last year.

Scott Barnes, CEO of Grant Thornton UK, says, ‘Whilst this report, and many other recent economic indicators, are painting a bleak picture for both the UK and the global economy it's important not to completely ignore the positive signs.

‘Overall global business optimism has actually increased since this time last year. It is now vital that governments and international organisations such as the IMF demonstrate that they are able to steer the global economy and make credible decisions. Developing a confidence in national and global leadership is vital as this will increase business optimism and, in turn, nurture the shoots of recovery that are still evident.’

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