UK businesses recover some confidence: Lloyds Bank

BRITISH business confidence grew in October after a drop in September and company bosses plan to boost their prices and their hiring, according to a survey that will feature in the Bank of England’s interest rate discussions this week.

The Lloyds Bank Business Barometer, which surveys around 1,200 companies across the economy and is often cited in the BoE’s quarterly reports on the economy, rose to its second-highest level of 2023 at 39 per cent, up from 36 per cent in September.

“However, our data shows that firms are still safeguarding their profit margins in response to the possibility of interest rates remaining high, wage increase pressures, and the prospect of higher energy prices again this winter,” Hann Ju Ho, senior economist at Lloyds Bank Commercial Banking, said.

Pricing expectations rose for a third month in a row to hit a new high for 2023 with 62 per cent of firms planning to increase their prices and only 3 per cent planning to reduce them.

Companies expecting to raise their staffing levels rose by three points to 48 per cent compared with 16 per cent that planned job cuts. Pay increase expectations remained high.

The survey was conducted between Oct 2 and Oct 16.

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The BoE is expected to keep interest rates on hold on Thursday, its second no-change decision in a row after 14 back-to-back increases to fight high inflation. REUTERS