Hopes of economic revival buoys business confidence
Business confidence has crept into positive territory for the first time since March 2020.
Confidence across all UK regions and nations, Lloyds Bank found, with the North West, East Midlands and London businesses the most positive.
Lloyds surveyed businesses in the first half of February, before Prime Minister Boris Johnson announced the ‘roadmap’ out of lockdown, which helps to provide early signals about business trends.
Lloyds Bank senior economist Hann-Ju Ho said: “The uplift in business confidence and its entry into positive territory after nearly a year suggests that firms are cautiously pinning their hopes on economic revival in the future and the continued success of the vaccine rollout.
“In the coming weeks, announcements in the budget and prospects of an easing of lockdown restrictions will hopefully help to bolster the recovery in business confidence as the economy starts to reopen.”
Hiring sentiment remained in negative territory, but it was the least negative since last March.
Lloyds also found some indications that wage freezes may be thawing, with just over a quarter (26%) of firms expecting no pay increase in the coming year, down two points since January.
At the same time, however, there was little indication of significant wage rises, with the proportion of firms expecting pay increases of 2 per cent or more at 18 per cent, close to the average since the start of the pandemic.