UK business confidence weakens as doubts grow over wider economy
US President Trump had threatened to impose tariffs on Britain and other European countries over Greenland
[LONDON] British business confidence has weakened this month after executives’ view of the global economic outlook declined to its darkest in a year, a survey by Lloyds showed on Friday.
Lloyds’ business barometer slipped to a net balance of +44 per cent in January from +47 per cent in December, driven by a 14-point drop in businesses’ net economic optimism to a one-year low of +28 per cent.
During the Jan 5 to Jan 20 survey period, President Donald Trump threatened to impose tariffs on Britain and other European countries which opposed his efforts to bring Greenland under US control.
However, businesses’ expectations for their own activity rose by 7 points to a three-month high of +59 per cent, mirroring an upturn in other surveys such as last week’s S&P Purchasing Managers’ Index for January.
Hiring plans strengthened for the first time in three months and wage growth expectation also rose. Just over one in five firms expected salaries to grow by 4 per cent or more, the largest proportion in five months.
“Firms are reporting confidence in their trading prospects at the start of the year, despite a slight softening of wider economic optimism. This points to businesses’ ability to manage external risks and a focus on growth opportunities,” Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said.
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Business confidence is stronger than a year ago and above its long-run average of +30 per cent, Lloyds said, though it is below levels seen in the middle of the year, before concerns about renewed tax rises in finance minister Rachel Reeves’ annual budget began to weigh on sentiment.
The survey was based on responses from 1,200 businesses with annual sales of at least £250,000 (S$435,000). REUTERS
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