Lloyds Bank has delivered a significant and positive update for the UK economy, confirming that business confidence will finish the year 2025 notably stronger than it began.
Confidence Climbs as Year Ends
In an announcement made on December 23, 2025, the bank confirmed that overall business confidence has risen by 10 points since the start of the year. The latest data shows that 47% of businesses now report feeling confident, marking a five-point increase from previous levels. This uplift is primarily driven by growing optimism in the wider economy, which has jumped 11 points to reach a four-month high in December.
Construction Sector Sees Major Boost
The most dramatic improvement was witnessed in the construction industry. Firms in this sector reported a massive 22-point surge in confidence during December, pushing it to its highest level throughout the entire year. Retailers also shared in the positive sentiment, with their confidence rising as the crucial peak sales period approached.
Hann-Ju Ho, Senior Economist at Lloyds Commercial Banking, commented on the findings. "It is great to see business confidence ending the year on a higher note, up ten points from the start of the year," he stated. "The uplift in business confidence is driven by an 11 point increase in optimism in the wider economy."
Looking Ahead to 2026
Paul Kempster, Managing Director for Commercial Banking Coverage at Lloyds Business & Commercial, highlighted the importance of this momentum for the future. "To end the year stronger than where we started will be a boost for businesses as they gear up for the growth opportunities that they hope lie ahead in 2026," he said.
He advised that for all companies, regardless of their sector, focusing on maximising cashflows, strategic investment, and closely monitoring margins would put them in a strong position for the coming year.
The report also provided insight into hiring plans. While remaining positive, the proportion of firms with plans to hire in the year ahead eased slightly to 55%, down one point. Meanwhile, the percentage of businesses expecting to increase their headcount over the next twelve months held steady at 17%.
