UK business confidence bounces back to five-month high

Business confidence has bounced back to its highest level in five months, driven by improvements for both trading prospects and economic optimism.

This is according to data from the Lloyds Bank Business Barometer, which revealed that the net balance for trading prospects reached its highest level since the start of the pandemic (up four points to 45%). Optimism for the wider economy rose six points to 43% from 37%.

Hiring intentions were also up, rising to their highest levels since September (when the furlough scheme ended), with over half of the firms surveyed saying they’re looking to increase their staff headcount over the next 12 months.

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said, “It’s extremely encouraging to see such an improvement in business confidence reaching its highest level since September, fuelled by trading prospects reaching their highest level since the start of the pandemic.

“With hiring intentions also reaching their highest level since the end of the furlough scheme there is hope that the easing of supply bottlenecks will alleviate a number of challenges that businesses have been facing and help underpin the UK’s growth in 2022.”

Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, added, “The UK’s expected future growth is in positive territory following February’s rise in business confidence, trading prospects and economic optimism.

“Ten out of the 12 regions reported a growth in confidence, with a particularly pleasing rise in the North East which reversed its decline in January, indicating that businesses are looking forward with renewed optimism.

“The UK’s construction and manufacturing sectors have seen the biggest benefit as COVID-19 restrictions and supply challenges ease, while the retail sector has also seen a boost in confidence.”

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