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Brexit hits London business confidence

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Business confidence in London fell three points during November to 34 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the capital report lower confidence in their business prospects, down four points to 40 per cent, and lower economic optimism, which fell one point to 28 per cent.

Nationally, however, overall confidence bounced back, climbing five points to 24 per cent as firms’ optimism about the economy rose nine points to 17 per cent. Companies’ confidence in their own business prospects rose two points to 31 per cent.

In the capital, companies’ hiring intentions showed that a net balance of 35 per cent of businesses expect to hire more staff during the next year, down three points on last month.

Across London, a net balance of three per cent of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, down seven points on a month ago.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said: “Although London has bucked the national trend and seen confidence fall this month, firms in the capital are still far more optimistic than the rest of the UK.

“The fact that a net balance of 35 per cent of businesses in the capital still expect to invest in creating new jobs in the coming year demonstrates their resilience and shows they are planning for future growth.”

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Despite their falling confidence, London businesses were the third most confident in the UK, behind Yorkshire, at 43 per cent, and the West Midlands (39 per cent).

Those in the East Midlands were the least confident, with an overall confidence of 10 per cent, 14 points below the national average.

Firms in the manufacturing sector saw the largest increase overall, rising by 11 points to 32 per cent, while construction also registered a significant improvement of seven points to 29 per cent.

Retail confidence edged up by one point to 30 per cent, while other services rose five points but still continued to lag behind other sectors at 20 per cent.

Concerns about the impact of leaving the EU were the highest in manufacturing and other services

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Following last month’s dip, with business confidence reaching its lowest level since August 2017, it is reassuring to see that business confidence has picked up, helped by stronger economic optimism and hopes of a Brexit deal.”




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