Business confidence in London rose one point during February to 47%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the capital reported lower confidence in their own business prospects month-on-month, down two points at 49% but still among the highest in the UK. When taken alongside their optimism in the economy, up five points to 45%, this gives a headline confidence reading of 47%.
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. This month’s survey captured responses between 1st and 15th February before the removal of various Covid restrictions across the UK’s nations.
A net balance of 38% of businesses in the region expect to increase staff levels over the next year, up two points on last month.
Overall UK business confidence saw an uptick in February, rising five points from January’s reading of 39% to 44% – its highest level since last September. Firms remained positive about their future trading prospects, with a four-point increase month-on-month to 45%, while optimism in the economy overall also increased by five points to 43%. The net balance of businesses planning to create new jobs rose by nine points to 38%.
Every UK nation and region maintained a positive overall confidence reading in February. The North East (up 17 points to 57%), South West (up nine points to 46%) and West Midlands (up eight points to 47%) saw the biggest increases month-on-month, with the North East reporting the highest levels of business confidence overall. Only the North West (which remained unchanged at 44%) and Scotland (down two points to 35%) did not have higher confidence readings than last month.
Becci Wicks, regional director for London at Lloyds Bank Commercial Banking, said: “London firms remain in extremely positive spirits. From Soho to the City, workers are returning to offices more and more which is giving pubs, restaurants and retailers a welcome boost to their footfall. Of course, there are challenges with rising prices and supply chain issues, but the sense of optimism remains.
“As firms look ahead to a successful spring and summer, we’ll be by their side to ensure they’re well prepared to take on any challenges and capitalise on opportunities for growth.”
The further easing of Covid restrictions in January had a positive impact across the sectors with strong increases in manufacturing (up 11 points to 54%) and construction (up 18 points to 51%) with both reaching their highest level since the start of the pandemic. Retail confidence rose three points to 47%, another high since the start of Covid. Services remained unchanged at 38%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “It’s extremely encouraging to see a such an improvement in business confidence reaching its highest level since September, fuelled by trading prospects reaching their highest level since the start of pandemic.
“With hiring intentions also reaching their highest level since the end of the furlough scheme there is hope that the easing of supply bottlenecks will alleviate a number of challenges that businesses have been facing and help underpin the UK’s growth in 2022.”
