Business confidence takes a dip in September – but analysts say not to worry
Business confidence has taken a dip as we head into winter, with UK companies feeling less optimistic this month than they did in August, according to the latest survey by Lloyds Bank.
Business confidence has fallen to 36 per cent this month, five per cent below what was recorded in August, according to Lloyds Bank’s Business Barometer survey.
However, business confidence was reported to still be higher than the first three months of the year, when it remained at just 20 per cent.
Trading prospects were also down five per cent, with 52 per cent of UK businesses expecting “stronger” activity within the next year, and an unchanged 11 per cent expecting “weaker” activity.
While the confidence seen in August has not been “maintained”, Hann-Ju Ho, senior economist at Lloyds Bank’s Commercial Banking, said it is essential to consider the “wider trend”.
“Despite some month-to-month movements, if you look at the year in quarterly time periods, confidence has steadily risen from 20 per cent in the first quarter, 26 per cent in the second and now an average of 27 per cent in the third,” he added.
Economic environments are still “uncertain”, Ho said, but the Bank of England’s recent decision to not change interest rates will be beneficial for businesses, helping them feel more “upbeat about the future.”
Paul Gordon, managing director for relationship management at Lloyds Bank Businesses & Commercial Banking, said inflation, energy prices and interest rates have been the largest issues for the UK economy.
“With recent data from various organisations in August showing inflationary measures having their desired effect, including our own UK Sector Tracker which showed demand falling across most sectors, the coming months may see a more stable environment where prices are concerned,” he added.
The survey reported levels in business confidence still remain “well above” the 22-year average of 28 per cent, with monthly rises remaining larger than the falls.