By Matthew Legg

Last updated 13:59, Monday, 01 December 2008

Business confidence in Cumbria and the north east has dipped sharply amid mounting concerns among firms about cash flow, access to finance and bank charges.

Financial advice: ‘Maintaining cash flow is the main priority and sound financial management is now more important than ever as we face another turbulent year,’ says Keith Proudfoot

As Britain teeters on the brink of a recession, which commentators expect to last into 2009, the gloomy outlook for the next 12 months is reflected in the latest UK Business Confidence Monitor (BCM) from the Institute of Chartered Accountants in England and Wales (ICAEW).

Senior business professionals in the the two areas record a confidence index score of -31.3 in the final quarter of 2008, down from -17.7 in the previous quarter – but still above the UK average -36.3.

ICAEW Northern director Keith Proudfoot said: “Businesses are increasingly worried about how deep and long the recession will be, with restricted access to capital, increasing bank charges and late payments from customers all giving real cause for concern.

“Maintaining cash flow is the main priority and sound financial management is now more important than ever as we face another turbulent year.”

Reflecting the continuing impact of the credit crunch, almost one in three firms (28 per cent) in Cumbria and the North East see access to capital as a greater challenge to performance now than 12 months ago, up from 18 per cent in the previous quarter.

Meanwhile, three in 10 businesses say late payments are now a bigger problem than 12 months ago.

That’s twice as many as felt this way at the start of 2008, according to the BCM.

Worries over bank charges are also growing, with one in five (21 per cent) firms in the two areas now more concerned about this issue than they were 12 months ago.

A detailed analysis of the survey can be viewed online at www.icaew.com/bcm