London business confidence surges to highest in the UK, according to Lloyds Bank

Business confidence in London rose 23 points during May to 63 per cent, the highest reading of any UK region or nation, according to the latest Business Barometer from Lloyds Bank Commercial Banking.  

Companies in the capital reported higher confidence in their own business prospects month-on-month, up 18 points at 68 per cent. When taken alongside their optimism in the economy, up 27 points to 58 per cent, this gives a headline confidence reading of 63 per cent. 

London businesses reported plans to target growth opportunities in the next six months, including entering into new markets (55 per cent), investing in their teams (49 per cent) and evolving their offering (33 per cent).

The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 68 per cent of businesses in the region expect to increase staff levels over the next year, up 37 points on last month, the highest level of any UK nation or region.

Overall UK business confidence increased by five points during May to 38 per cent, its highest level since February. Firms’ outlook on their future trading prospects rose three points to 42 per cent, and their optimism in the economy increased seven points to 33 per cent.

The net balance of businesses planning to create new jobs also increased by 11 points to 37 per cent. Every UK region and nation reported positive confidence readings in May. After London, Scotland (up 14 points to 42 per cent) and the North West (up 12 points to 44 per cent) reported the largest increases month-on-month.

Becci Wicks, regional director for London at Lloyds Bank Commercial Banking, said: “It’s hugely encouraging to see confidence among London businesses hit a six-month high, especially against the backdrop of ongoing challenges such as rising costs and skills shortages.

“Continuing this upbeat outlook and putting growth plans in place will rely on businesses managing their operations carefully. Keeping a close eye on cash flow and closely managing working capital will be key.

“At Lloyds Bank, we’ll remain by the side of companies across the capital with tailored support and products to help them achieve their ambitions.”