Business confidence in London strengthened sharply in June, with companies signalling improved trading prospects and a renewed appetite for investment.
The latest Lloyds Business Barometer showed confidence rising eight points to 55%, driven by stronger expectations for future sales and economic conditions.
Firms reported growing optimism in their own trading outlook, which climbed to 71%, supported by resilient customer demand and increased spending on technology and capacity.
Hiring plans also improved, with 51% of businesses expecting to expand their workforce over the next year — a 15-point monthly increase.
Despite the recovery, confidence remains below its 12-month average as companies continue to navigate higher costs and economic uncertainty.
London businesses are prioritising growth through investment in staff training, artificial intelligence and automation, and expansion into new markets.
The data suggests the capital’s firms are cautiously positioning for expansion, with technology investment emerging as a key driver of future competitiveness.
Kirsty Sadler, Regional Director for London at Lloyds, said: “It’s encouraging to see firms across the capital feeling hopeful about the wider economy and their own trading outlook.
“What’s particularly positive is that this isn’t just optimism, businesses are backing it with real investment. We’re seeing them prioritise training and team development, embrace new technologies and actively explore new markets.
“Half of businesses expect to increase staff levels over the next year. That tells us London businesses are confident enough to commit resources to pursuing growth. We’ll continue to support them as they invest, adapt and build on this momentum.”
Overall, UK business confidence fell three points in June to 44%.
Firms’ trading outlook fell two points to 56% and their optimism in the economy generally also fell four points to 31%.
The 12-month average for overall confidence is currently sitting at 47% and is trending above the long-term average of 30% since the survey began in 2002.
Despite a modest softening in business confidence due to wider global uncertainty, two thirds of firms nationally (64%) expect stronger output over the year ahead and hiring intentions for the coming twelve months strengthened for the first time since March.
The share of firms planning to increase their workforce rose to 55%, while 14% anticipated headcount reductions, leaving the net balance up five points at 41%. Firms intending to hire cited the need to meet strengthening demand and expand capacity, pointing to a degree of confidence in near-term activity.
Business confidence rose across six of the twelve UK regions and nations in June, with the South West seeing a 22pp jump to 44%, and the East Midlands becoming the most confident region.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said: “Confidence has edged down this month, and that reflects what we’re hearing directly from businesses. Many are still dealing with a mix of higher costs, uncertain demand and a wider global backdrop that feels difficult to read.
“That is weighing on decision making, particularly for firms that are focused on the UK market and have fewer ways to offset those pressures.
“However, this is not a picture of businesses stepping back altogether. Trading outlook remains relatively steady and we continue to see firms looking for new opportunities, even if investment plans have become more cautious.
“Businesses have shown over time that they can adapt in tough conditions, but for many the priority is managing costs and maintaining stability rather than pushing for growth?”
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