Business confidence rose to second highest level in 2023

Latest data shows that business confidence has risen significantly above the long-term average after a decline in September.

The Lloyds Bank report found that business confidence rose to 39% in October, a three-point increase, to reach the second highest level in 2023 – surpassed only in August (41%).

Firm’s hiring intentions also rose – the proportion of businesses planning to increase their headcount grew to 48% (up three points), while 16% (down four points) expect to reduce the number of employees.

Hiring intentions continue to remain stronger than at the start of the year with many firms prioritising retaining and attracting staff.

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said, “Business confidence this month reflects a more positive outlook as we head into the important festive period, with trading prospects and economic optimism both at their second highest levels this year.

“The level also underlines the wider upward trend of steadily rising confidence in 2023. If you look at the year in quarterly time periods, confidence has steadily risen from 20% in the first quarter, 26% in the second and in September an average of 27% in the third.

“However, our data shows that firms are still safeguarding their profit margins in response to the possibility of interest rates remaining high, wage increase pressures, and the prospect of higher energy prices again this winter.

“Therefore, businesses will be keeping a keen eye on the forthcoming Autumn Statement and Bank of England policy announcements as they navigate through a challenging economic period ahead.”

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