London business confidence was the joint-highest in the UK in December, according to the latest Business Barometer from Lloyds.
Companies in London reported higher confidence in their own business prospects month-on-month, up seven points at 64%. When taken alongside their optimism in the economy, up 27 points to 62%, this gives a headline confidence reading of 63% (vs. 46% in November) – the joint-highest of any UK nation or region, together with the West Midlands (also 63%).
A net balance of 47% of businesses in the capital also expect to increase staff levels over the next year, up two points on last month.
Looking ahead to the next six months, London businesses identified their top target areas for growth as investing in their team, for example through training (60%), introducing new technology, such as automation and AI (58%) and entering new markets (44%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall, UK business confidence rose five points in December to 47%.
While firms’ confidence in their own trading prospects dropped one point to 52%, their optimism in the wider economy strengthened 11 points to 42%.
The East Midlands (56%) recorded the second-highest confidence reading in December, after London and the West Midlands.
Sector Insights
Construction saw the sharpest improvement, up 22 points to 61%, its highest level seen this year. Manufacturing also was up five points to 49%, while retail firms edged higher to 47%, likely reflecting seasonal demand. Services confidence fell one percentage point to 41%.
Kirsty Sadler, regional director for London, said: “It’s fantastic to see London ending the year as one of the UK’s most confident regions, with a rise in both economic optimism and trading outlook.
“This momentum reflects the energy and determination we continue to see across the capital – from businesses investing in innovation, to those expanding into new markets or scaling their teams. We’ll be here to support firms across the city as they seize new opportunities and shape the year ahead.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “It is great to see business confidence ending the year on a higher note, up ten points from the start of the year.
“The uplift in business confidence is driven by an 11 point increase in optimism in the wider economy, increasing to a four month high.
“Confidence changed most in the construction sector which saw a big boost in December, to the highest level this year.”
