According to the Lloyds Bank Commercial Banking Business Barometer, business confidence remained high in February, maintaining its surge since January.
February continued to see a rise in trading prospects, increasing for the third month in a row to 24% from 22%, a ten-month high. Similar to last month, 37% of firms anticipate an improvement in their trading prospects, while 13%, down from 15% expect a decrease.
Concerns about the UK leaving the EU eased significantly in February and returned to positive sentiment for the first time since September 2018, to 7% from -7% last month.
Businesses’ views on the impact of leaving the EU were more optimistic, with 34% of businesses believing the UK’s exit will have a positive impact (up from 27%), while 25% (down from 34%) continue to expect a negative impact.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, commented, “The buoyed sustained results signal a return to economic growth for the first quarter of 2020 after a relatively flat final quarter end to 2019. The third consecutive rise in trading prospects and a swing to positive sentiment on the expected impact of leaving the EU are all tentative signs of improvement after the soft end to last year.”
Looking at a regional analysis, London was the most confident region (29%), followed by the West (28%) and East (27%) Midlands.
The East of England (26%), the South East (24%) and the South West (24%), remained close to the UK average of 23%. The least confident regions were the Northern Ireland (-8%) and Wales (-2%), both moving into negative sentiment.
Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, added, “It is encouraging to see that the regions are starting to align to the long-term national average. London has continued its strong start to the year and with Scottish confidence bouncing back, it could signal businesses’ positive reaction to greater political certainty.”
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