Business confidence in London leapt 22 points during January to 38%, the highest of any UK region, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in London report higher confidence in their business prospects at 39% and higher economic optimism at 37%. Together, this gives an overall confidence of 38%.
Businesses’ hiring intentions showed that a net balance of 23% of businesses in the region expect to hire more staff during the next year, up four points on last month.
Across the UK, overall confidence rose 13 points to 23% as firms’ optimism in the economy soared 22 points to 24%, while confidence in their own prospects increased four points to 22%.
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, “It’s hugely encouraging to see a significant increase in the confidence of firms across the capital, which looks to reflect the greater political and economic certainty ahead.
“This is shown in companies’ hiring plans and we’d expect more investment to follow as businesses revive growth plans that might have been put on hold.
“We’ll continue to be by the side of London businesses, and anticipate lending up to £2.6bn to them during 2020, as part of our wider national commitment to helping Britain prosper.”
Across the region, a net balance of 7% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity compared to 26% last month.
Businesses confidence in London was ahead of the South West at 34%, and the East Midlands at 31%. Those in Scotland were the least confident, with an overall confidence of -4%, 27 points below the national average.
In January, overall business confidence saw a marked improvement in the construction and services sector with construction increasing 15 points to 27%, while services increased 17 points to 21%. Confidence in the retail sector increased by two point to 24%, while the manufacturing sector saw a decrease of six points to 21%.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking said, “After a turbulent 2019, it is encouraging to see a solid rise in overall business confidence to start the new decade. These results, if sustained, could signal a stronger economic growth at the start of 2020, although risks to the central outlook remain.”