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CBI: Eurozone crisis forces strategy rethink for UK’s leading businesses

CONFIDENCE among the UK’s biggest businesses has suffered a sharp decline over the past three months, forcing companies to consider cutting back on investments and reducing staff numbers.

According to a survey published by the Confederation of British Industry (CBI) ahead of its annual conference, the continuing eurozone crisis and the possibility of a second banking crisis is weighing heavily on corporate sentiment, with 70% of those polled claiming their level of confidence in the economic outlook had fallen since the beginning of August.

Nearly 60% said they are likely to revise their business strategy, while 38% said they plan to change their workforce plans, and a third are revising their plans for expansion.

“Business confidence has been hit by the eurozone crisis and fears of a second banking crisis in 2012, so firms are revising their investment and employment plans,” said CBI director-general John Cridland.

Despite the sharp fall in confidence and the increase in economic uncertainty, 82% of business leaders are firmly behind the coalition government’s deficit reduction strategy and do not believe that it should be scaled back.

“Business leaders believe the government is right to stick to its deficit reduction strategy, but that it must go hand-in-hand with some fresh thinking and a more creative growth strategy,” said Cridland.

“We’re at a critical tipping point, with the eurozone crisis reaching a crescendo and UK GDP growth forecasts being revised down. The chancellor needs to use his autumn statement to boost business confidence with game-changing new ideas,” Cridland added.

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