Firms are more pessimistic about the state of the UK economy than at any time in the past five years, according to a new report.
A survey of 200 companies by Lloyds TSB showed that just over half were pessimistic, with only one in three expressing confidence.
Despite the gloomy response to the poll, half of firms were more confident about the level of their own business activity.
Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "While there has been a steady trend towards economic pessimism during the last four months, firms became far more cynical in December "This would indicate the UK is set for a period of below-trend growth but the Bank of England's decision to start cutting interest rates could still reverse the spiral."
Mr Williams said interest rate cuts in the next few months should restore optimism to British business.
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