UK business confidence jumps - survey
By Abigail Townsend
Date: Wednesday 31 Jan 2024
(Sharecast News) - UK businesses started the new year with an upbeat outlook, a survey claimed on Wednesday, buoyed by easing inflation and the prospect of falling interest rates.
According to the latest Lloyds Bank Business Barometer, overall confidence rose nine points in January to 44%. It was the biggest monthly increase since August, and the highest level since February 2022.
Lloyds added that it was also the strongest start to a year since January 2016.
Respondents, who were surveyed about their trading prospects and overall optimism, pointed to the easing of inflation and the growing likelihood of interest rate cuts.
Broader economic optimism rose to 37%, while trading prospects came in at 51%, up three points.
Hiring intentions also strengthened after slowing in December. A net balance of 33% said they expected to increase headcount, a four-point improvement on the previous month.
Within individual sectors, services recorded a 15-point jump in confidence, to 45%, while construction rose eight points, also to 45%.
Hann-Ju Ho, senior economist at Lloyds, said: "Businesses are felling more confident following the cautious end to 2023.
"With ongoing political issues and a general election on the horizon, businesses will have factored these into their risk radars and will be working to prepare for any potential impacts on their trading prospects."
Around 1,200 UK firms with annual turnover above £250,000 were surveyed between 3 and 17 January.
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