UK business confidence softens but still reportedly remains above long-term average. This, according to the latest update from the Lloyds Banking Group. As mentioned in a report from UK‘s Lloyds Bank, the overall business confidence fell a number of points to just over 40% in the past calendar month.
Some quick takeaways and facts shared by Lloyds Bank:
Hiring intentions remain positive despite falling slightly from October.
Price pressures show signs of easing with “lowest levels” since January 2025.
Retail confidence remains higher than “this time last year.”
Survey data was collected ahead of the Budget.
Business confidence declined in the past month of November by as much as eight points “to 42%, according to the Lloyds Business Barometer, but still remains considerably above the long-term average of 30%.”
The survey was conducted between “3 – 17 November, ahead of the Budget.”
In addition, the November barometer revealed that:
- Trading Prospects: Confidence in businesses’ own trading prospects fell nine points to 53%, while economic optimism fell eight points to 31%.
- Hiring Intentions: 56% of firms expect to increase headcount over the next 12 months, down from 60% in October. Those anticipating reductions rose to 17%, leaving a net balance of 39%.
- Wage growth: Firms expect slightly lower wage growth, with over a third (35%) expecting pay rises of 3% or more in the next 12 months, fewer than the 39% who found pay had risen 3% or more in the past 12 months.
- Price pressures: Businesses’ saw prices easing, with the net balance of firms planning price increases falling to 60%. 64% of firms said they would raise prices in the coming year, while those anticipating price reductions rose to 4%, up from 2%.
Business confidence has eased, with trading and economic prospects softening, though both “remain above their long-term averages.”
The team at the bank said that firms will need to “remain adaptable and resilient as we head into the New Year.”
Many are now said to be thinking ahead and are reportedly “considering workforce developments such as additional training or upskilling, as well as adopting new technologies.”
Retail confidence remains higher than this time “last year, at 45%, 12 points higher than November 2024.”
The service sector is said to have broadly held steady at “42% while confidence in manufacturing and construction saw slightly sharper declines to 44% and 39% respectively.”
While business confidence has tempered this month, “a wide range of metrics remain above the long-term average.”
As businesses plan for the upcoming financial year, many will be thinking about opportunity to “upskill their workforce, innovate products or explore new markets all with a view of support their growth ambitions as they head into the new year.”
At Lloyds, they are focused on supporting businesses with those growth targets and objectives, offering regional as well as sectoral insights.