The FTSE Index hit an 8 month of 5976.19 yesterday, an 8 month high and tantalisingly close to the psychologically significant 6000 mark.
Banks were the biggest gainers as the US Federal Reserve upgraded its outlook and said the most large banks had passed its annual stress test, news which was met with enthusiasm from investors. It was also a good day for insurers, with Legal and General rising 4.2 per cent to top the FTSE 100 leader board. “We’re in the positive camp,”
This news comes alongside a report published by the Federation for Small Business (FSB), which said confidence among its members was on the up for the first time in more than a year. Charles Davis, the FSB’s head of macro-economics said: “A positive reading is very welcome news after the sour mood which has prevailed in recent months and gives us reason for cautious optimism about employment and investment.”
Similar surveys conducted by Lloyds TSB and accountants BDO both indicated similar rises in optimism about the economy.
The FSB’s Voice of Small Business index jumped from -24.5 at the end of last year to +2.2 in the first quarter of 2012, the first time it has seen positive territory since early 2011. The index measures 3000 business owner’s predictions for economic conditions over the next three months. A rating above zero means more companies are positive than negative.
Small companies are reportedly still struggling to access finance, with 41 per cent of businesses who sought to borrow money in the last three months turned away. The FSB now believes there is a fair chance of the UK avoiding a further recession..