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Despite many firms being concerned about rising costs and economic slowdown, business confidence rose for the first time in three months.

The Lloyds Bank Business Barometer also revealed that the number of firms expecting to give higher pay awards increased, with 16% likely to make awards of four per cent or more as hiring intentions pick up.

According to the data, employment intentions rose for the first time in three months, with 53% of firms expecting to increase their workforce – this is the second highest level seen since the start of the pandemic.

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said, “Business confidence improved this month and firms in general seem able to rebuild some of their margins through price increases. However, they also report several challenges ahead, including concerns around higher costs and an economic slowdown. More immediately, consumer-facing industries, such as retail, are not feeling the same confidence uplift amid the widespread reports of a squeeze on household incomes.”

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Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, added,“It is reassuring to see a number of positives coming out this month as businesses show that despite challenges, confidence is increasing once again. However, it is understandable that there continues to be caution around the future, given inflationary pressures and potential for economic slowdown.

“In response, businesses should ensure they keep a tight rein on input costs to help support profit margins and keep working closely with their suppliers and customers to ensure any changes in supply or demand are noticed in good time.

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