by business editor Trevor Sturgess

Confidence among business people is edging up, but there are still worries about finance.

That is the conclusion of KPMG’s latest confidence survey.

The mood of leading British businesses, including some from the south east, has lifted from the rock bottom reached this spring, and levels of confidence about prospects are at their highest since spring 2008.

The proportion of senior executives questioned for KPMG by Opinion Leader Research thinking their business prospects are good has almost doubled to 42 per cent from 22 per cent in the first quarter.

But they are far gloomier about the wider economy. Just over half (54 per cent) consider the UK economic outlook to be bad, while fewer than one in 10 (nine per cent) are bullish about economic prospects.

Fifty-five per cent believe the economy is at the bottom of the cycle, with most expecting the recession to last less than a year - 49 per cent compared to 14 per cent in the first quarter.

One in three admit to experiencing financial difficulties. The number facing higher financing costs has grown to 51 per cent, as against 41 per cent last quarter, with more businesses facing tighter borrowing - 53 per cent against 51 percent in the spring.

Paul Gresham, senior partner for KPMG in Gatwick, said: "It’s quite peculiar that in tandem with a worsening in the financial problems businesses are grappling with, their confidence levels have risen.

"It perhaps demonstrates that even as their agendas are being hit by new challenges, they are taking heart from the relative stability in the economy over the last few months - a period without dramatic and negative announcements.

"I think we are somewhere close to the bottom and that we may need to get used to this uncomfortable position. The jury is still out as to the likely shape of the recession and an L-shaped one - with a long period of relative stability but nothing constituting a recovery - cannot be ruled out.

"The issues affecting the economy over the last year or so - weak demand, spare capacity, margin pressures and funding issues - won’t magically disappear."