UK Business Confidence Levels Remain Resilient

29 January 2016

Lloyds Bank’s Business Barometer for January 2016 shows:

  • UK business confidence levels remain resilient, despite financial market volatility
  • A decline in perceptions of wider economic prospects was offset by an improvement in business prospects
  • The net balance of firms expecting to increase their staff levels rose for a third consecutive month

UK business confidence levels have shown a steady start to the year, despite an increase in financial market volatility, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

The net score of business confidence remained at 45% in January, consistent with quarterly GDP growth of 0.5 – 0.6%. The net balance of firms expecting their business or trading prospects to improve throughout 2016 increased by 10 points to 55% - the first rise in three months.

This positive outlook for business prospects, however, was offset by an easing of economic optimism.  The net balance of firms that are more optimistic about economic prospects compared with three months ago remains in firmly positive territory, but fell for a second consecutive month by 10 points, to 34%, matching the lowest level recorded during 2015.

Nonetheless, for the third consecutive month the companies surveyed expected to increase their headcount. The net balance rose by two points to 34%, with almost four in ten (39%) firms expect to increase their staff levels over the coming year, whilst only 5% anticipate a reduction.