UK business confidence rose during October, increasing 8 points to 50%, according to the Lloyds Business Barometer. The significant increase comes after a drop in September, with the recent uplift said to be marked by increased confidence across several regions as well as sectors. Overall confidence in UK businesses’ own trading prospects increased by a considerable 11 points to about 62%, meanwhile, economic optimism has also improved for the first time in 3 months, up a sizeable 6 points to nearly 40%.
UK businesses’ hiring intentions for the upcoming year also improved, with the majority or 60% of all businesses surveyed now said to be expecting to hire more staff in the year ahead, up from around 55% in September of 2025. Notably, 12% said that they now anticipate “reducing staffing levels, down from 17%, resulting in a net balance of 48%.”
As noted in the update shared by Lloyds Bank, overall wage growth expectations remained steady in October, with “32% of UK businesses forecasting average pay increases of 3% or more.”
As stated in the report, UK businesses’ price expectations remained unchanged in October, with “a net balance of 63% of firms expecting to raise prices over the next year. 65% of firms said they would raise prices in the coming year, while those anticipating price reductions remained at 2%.”
As mentioned in the report from Lloyds Bank, UK business confidence has risen following a fall in September, “with trading prospects and economic optimism nearing the levels reported in the summer.” Pricing pressures appear to have eased but continue “to be driven primarily by general inflation and rising input and staffing costs.”
Over the course of this past year, firms have “demonstrated their resilience by adapting to challenges, despite higher labour costs, by focusing on hiring and workforce development.”
As revealed in the update from UK’s Lloyds Bank, the month of October saw the manufacturing sector’s confidence increase “by 31 points to 62%, indicating stronger momentum in the sector.” Retail firms also reported a rise in confidence, with the figure “increasing by 13 points to 53%.” And construction saw a confidence gain for the first time in five months, “increasing 23 points to 58%.” But the service sector saw a decline for “a third consecutive month, falling three points to 44%.”
Nine of the United Kingdom’s twelve major regions and nations reportedly experienced a rise in confidence in October. The North East, West Midlands and London were the “most upbeat while Scotland remained above the UK average.”