Lloyds Bank has delivered an encouraging update for its business customers, revealing a significant rebound in confidence across the UK during October.
Key Findings from the Business Barometer
According to the latest Lloyds Business Barometer, overall business confidence climbed eight points to reach 50%. This uplift comes after a noted dip in September and is marked by improved sentiment across several regions and industry sectors.
Digging into the details, confidence in businesses’ own trading prospects saw a robust increase of 11 points to 62%. Furthermore, economic optimism improved for the first time in three months, rising six points to 39%.
Sector-Specific Optimism and Hiring Intentions
Paul Kempster, Managing Director for Commercial Banking Coverage at Lloyds Business & Commercial, commented on the findings. He stated it was particularly encouraging to see confidence returning to the manufacturing and construction sectors, which he highlighted as playing a key role in national prosperity.
Looking ahead to the busy festive period, he added: "As we head into the busiest time of year for retailers, it’s positive to see their confidence rise at the start of the ‘golden quarter’. More broadly, it’s good to see confidence across all sectors higher on average this year than last year."
In another positive sign, businesses’ hiring intentions for the next 12 months also improved. The survey found that 60% of all businesses now expect to hire more staff in the coming year, a rise from 55% in September.
Economic Context and Future Outlook
Hann-Ju Ho, Senior Economist at Lloyds Commercial Banking, provided further context: "Business confidence has risen following a fall in September, with trading prospects and economic optimism nearing the levels reported in the summer."
He noted that while pricing pressures appear to have eased, they continue to be driven primarily by general inflation and rising input and staffing costs. Despite these challenges, firms have demonstrated resilience by adapting and focusing on hiring and workforce development.
The report also indicated that businesses' price expectations remained unchanged in October, with a net balance of 63% of firms still expecting to raise their prices over the next twelve months.
