U.K. executives’ confidence for 2013 improved this month, indicating the risk of a triple-dip recession has receded, according to Lloyds Bank.
An index of business sentiment rose to 40 from 35 in November, the unit of Lloyds Banking Group Plc said in a report in London today. A gauge measuring the outlook for the economy increased to 20 from 17, which Lloyds said is consistent with “broadly flat underlying growth” at the end of this year.
Britain’s economy emerged from a recession in the third quarter, helped by a boost from the London Olympic Games. While the Bank of England has said gross domestic product may decline this quarter in what will be a “zigzag” pattern of output, it forecasts a gradual recovery through 2013.
There is a risk of a “marginally negative outturn in the headline figure due to the unwinding of Olympics-related consumption,” said Trevor Williams, chief economist at Lloyds Bank in London. “However, the upward momentum in confidence, if sustained, would point to a return to growth in the early stages of 2013, though external risks remain.”
Lloyds said the increase in both sentiment indexes suggests the probability of a recession, defined as two consecutive quarters of negative growth, fell to 11 percent this month -- the lowest level since April -- from 17 percent last month.