London businesses are most confident in the UK despite slide in economic optimism

Business Barometer reveals

London businesses are the most confident in the UK, despite the fact optimism in the economy fell 20 points during June, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Economic optimism among companies in the capital fell to 31 per cent since May, weighing on firms’ confidence in their own business prospects, which slid three points to 49 per cent.

Together, this gives an overall confidence of 40 per cent, which despite being 12 points below last month’s figure of 52 per cent, is the highest in the UK.

Companies’ hiring intentions show that a net balance of 48 per cent of businesses in London expect to recruit more staff during the next year, up four points on last month.

Nationally, overall confidence fell six points to 29 per cent, as firms’ optimism about the economy fell, weighing down their confidence in their own business prospects.

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: “Despite having concerns about the economy, confidence among London firms is the highest in the UK.

“As a result, business leaders are planning to invest in ensuring they have the right talent to drive long-term growth.

“This resilience is encouraging considering the uncertainty businesses face on everything from our future trading relationships to the prospect of rising interest rates.”

Across the capital, a net balance of 21 per cent of businesses say they feel that the UK’s exit from the European Union is having a positive impact on their expectations for business activity, down 16 points on a month ago.

Meanwhile, a net balance of 53 per cent of London companies expect the Bank of England to increase interest rates this year, with the average* firm indicating that raising rates to 1.5 per cent would have a significant negative impact on their business.

Regional picture

 

Outside London, confidence is highest across the North of England, where overall confidence is at 35 per cent in each of the North East, North West, and Yorkshire.

Businesses in the South East are least confident, with an overall confidence of 15 per cent, 14 points below the national average.