Business confidence in the UK economy rose in March 2023, according to a new report from the Institute of Directors (IoD).

The IoD's directors' economic confidence index rose to -13 in March, up from -17 in February. Directors were also more optimistic about the prospects of their own firms, with confidence rising from +41 to +44.

In contrast to official forecasts from the Office of Budget Responsibility, the report also suggested that the economy grew strongly last month.

Half of firms (50%) reported that their order books had strengthened since the end of 2022, with only 22% saying they had weakened. Directors' expectations of future turnover, recruitment and investment were also positive.

However, concerns about inflation remained high. Only 28% of members believed inflation had already peaked - down from 33% the month before. A further 50% said they did not expect it to peak until this summer.

Kitty Ussher, chief economist at the IoD, said:

"The data coming from our members is strongly suggestive of growth across all sectors in recent weeks.

"While this is undoubtedly good news, strong demand also means that it may take longer than many forecasters currently expect for inflation to come within sight of the Bank of England's target any time soon."

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