UK business confidence hits highest since March as firms see stronger demand, Lloyds says

British business confidence climbed to its highest level since March in August, with companies reporting stronger customer demand and a more positive outlook for the wider economy, according to a Lloyds survey.

Lloyds said its monthly business confidence index rose by 4 percentage points to +53 per cent in August, moving above its 12-month average of +47 per cent. The reading points to growing optimism among UK companies despite continued economic uncertainty.

Optimism about the wider UK economy recorded the biggest improvement, rising 7 points to +49 per cent, well above its 12-month average of +37 per cent. Businesses also became more confident about their own trading prospects, with the corresponding index increasing 2 points to +58 per cent.

The improvement comes amid other signs that the UK economy is gaining momentum. S&P Global data released last week showed the fastest growth among British businesses in six months, adding to indications of improving economic activity.

“Overall, businesses are reporting stronger customer demand, greater optimism about the wider economy and growing confidence in their own trading outlook,” Amanda Murphy, chief executive of Lloyds Business and Commercial Banking, said.

The latest survey also offered some encouraging news on inflation. The share of businesses planning to increase their prices over the next 12 months fell 3 percentage points to 51 per cent, its lowest level since 2022.

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The moderation in price expectations could ease some pressure on the Bank of England as policymakers assess the path for interest rates and inflation.

The Lloyds survey was conducted by Ipsos among 1,200 UK companies with annual sales of at least £250,000.

The latest reading suggests that businesses are entering the second half of the year with greater confidence, supported by improving demand and expectations of stronger economic conditions.