Business confidence in London rose four points during August to 41%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the capital reported higher confidence in their own business prospects month-on-month, up 14 points at 43%. When taken alongside their optimism in the economy, down six points to 39%, this gives a headline confidence reading of 41%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
A net balance of 28% of businesses in London expect to increase staff levels over the next year, no change month-on-month, and behind only the North West (39%) and North East (34%).
Overall UK business confidence rose six points in August, reaching 36%, the highest level recorded since May 2018. When asked about their overall trading prospects businesses reported a six-point increase on July’s reading at 34% and firms’ confidence in the UK economy also increased six points to 39%.
All UK nations and regions had a positive confidence reading in August. Alongside London, the most confident regions were the North West (64%) and North East (46%). All bar three areas reported a growth in confidence in August, with the East Midlands (down 10 points to 28%), West Midlands (down three points to 27%) and Yorkshire and Humber (down two points to 26%) reporting marginal falls.
Mark Amis, regional director for London at Lloyds Bank Commercial Banking, said: “After a slight dip in July, it’s encouraging to see London business confidence back on the up, and firms feeling buoyant about their trading prospects and reporting plans to increase headcount. As the vaccination drive continues apace and restrictions on international travel are eased, the capital’s world-famous tourism and hospitality sectors will be hoping the outlook remains positive.
“Whatever lies ahead, we will be firmly by the side of London businesses to help them look forward to a bright future.”
In sector terms, there was notable strength in sectors benefiting from the further easing of Covid restrictions. Services confidence saw the greatest month-on-month increase, rising by 8 points to 36%, the highest level since January 2018. Confidence in both manufacturing and construction also picked up (both up 7 points to 40%), led by rises in trading prospects for the year ahead. The increase in manufacturing confidence came despite ongoing supply disruptions, although the level remains below the high in May. Retail confidence posted a smaller 2-point rise to 34%, remaining below the recent peak in May.