Latest findings have shown that overall UK business confidence rose to the highest level in nearly two years.
The Lloyds Bank Business Barometer measures business confidence by assessing trading prospects and optimism in the economy.
The data shows that confidence rose to 44% – up 9 points on the previous month. It was the biggest monthly increase since August and the highest level of confidence reported since February 2022, when the UK economy was recovering from the Covid-19 pandemic.
It is also the strongest start to a year since January 2016.
The survey revealed that more businesses expect to hire this year and the general longer-term view is that while wage growth expectations are relatively low, they still remain above pre-Covid levels.
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Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking said, “Businesses are feeling more confident following the cautious end to 2023, with this being the strongest start to a year since January 2016. The reduction in inflation, albeit with the recent uptick, and the belief that interest rates may have peaked is likely driving the rise in confidence among firms.
“With ongoing geopolitical issues and a general election on the horizon, businesses will have factored these into their risk radars and will be working to prepare for any potential impacts on their trading prospects.
“Also, half of all companies say they’re planning to increase headcount in the coming year. Despite that and the changes to minimum wage that will come into force in April, expectations for staff pay fell back following last month’s increase.”
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