Business confidence in London fell four points in May to 47%, according to the latest Business Barometer from Lloyds.
Companies in London reported higher confidence in their own trading outlook month-on-month, up five points at 64%. When taken alongside their optimism in the economy, which is down 12 points to 30%, this gives a headline confidence reading of 47% (vs 51% in April 2026).
More than a third (36%) of businesses in the region also expect to increase staffing levels over the next year, down nine points from last month.
Since May 2025, London has had an average overall business confidence of 58%, with its highest at 69% in August last year and its lowest at 46% in November.
Looking ahead to the next six months, London businesses identified their top target areas for growth as introducing new technology, such as AI or automation (53%), entering new markets (52%), or investing in their team (45%).
Kirsty Sadler, regional director for London, said: “While overall business confidence in London has fallen slightly this month, it’s encouraging to see firms across the capital feeling more positive about their trading outlook.
“London firms are focusing on opportunities to grow, from adopting new technologies such as AI to expanding into new markets or investing in training for their people. We’re here to help businesses build resilience, with the financial support and expertise they need to navigate uncertainty and realise their growth ambitions.”
Overall, UK business confidence rose three points in May to 47%.
Firms’ trading outlook rose four points to 58% , and their optimism in the economy generally rose two points to 35%.
Sixty-six per cent expect stronger output over the year ahead, while 8% predict weaker activity.
The main drivers behind businesses expecting a decrease in activity remain the same as in April: economic uncertainty, higher cost pressures and weaker customer demand.
Business confidence rose across seven of the twelve UK regions and nations in May and decreased in four. Northern Ireland saw notable gains with Northeast and West Midlands becoming the most confident regions.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking said: “Business confidence edged up modestly in May, suggesting firms are beginning to steady after April’s decline. This month, confidence levels from businesses in the Northeast particularly stands out. It’s also reassuring to see that increased confidence from the construction sector has brought them more in line with their retail, services and manufacturing counterparts.
“Across the UK, each region and nation presents unique opportunities and drivers of growth – whether that’s clean energy in the Northeast, advanced manufacturing in the West Midlands or tourism and hospitality in Scotland. We’ve seen first-hand what the right financial support and advice can do for ambitious businesses and are keen to continue supporting our customers as they grow – helping Britain prosper.”
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