Business confidence finally stabilises

A new report has revealed that business confidence stabilised in September after falling for the last three months between June and August.

The Lloyds Bank Business Barometer shows that although business confidence did remain below the long-term average, it is still above the lowest levels seen in 2020 during the first wave of the pandemic.

Looking at a regional analysis, firms with the strongest confidence were based in London (33%), the North East (30%) and the West Midlands (19%).

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said,“It is encouraging to see business confidence stabilising after a three-month decline. Firms’ assessment of their own trading prospects also remained steady and continues to show some resilience during turbulent times.

“Yet, cost pressures remain, as more businesses look to raise prices to help protect their margins while wage pressures show little sign of abating at this stage.

“With the recent volatility in financial markets as well as the Government’s Growth Plan and energy cap announcements, it will be interesting to see how these measures affect business confidence.”

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Business & Commercial Banking, added, “Firms should take heart that nationally, business confidence has stabilised, while recognising that wage pressures may continue for some time.

“However, it is important to note that this data was collected ahead of the recent Fiscal Statement and the current market volatility, where the effect on confidence will be seen in next month’s data.

“Keeping a watchful eye on out-goings, especially energy bills as we head into the winter months, will ensure businesses are in the best possible position and right now businesses will be taking on board what the currency position means for their business models.”

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