Business confidence sees nine-point increase in June

Overall confidence increased by nine points, the biggest monthly rise since March, to a 13-month high of 37%. This was driven by rises both in firms’ trading prospects and their optimism regarding the wider economy. 
Additionally, sentiment climbed in ten of the 12 UK regions and nations and rose across the four main sectors.  

Alongside this, 54% of businesses expressed greater optimism about the economy – up from 48% - while those that were more pessimistic dropped from 26% to 22%. This resulted in the net balance growing by 10 points to 32% – a significant rise from the -3% since last November.  

As for their own trading prospects, there was a six percent increase in those anticipating stronger business activity in the next 12 months – going up from 49% to 55%. This is compared to a one percent drop in those expecting a fall in output, down from 15% to 14% – meaning the net balance increased by seven points to 41%, with this being the first improvement in three months.  

Lloyds Bank senior economist Hann-Ju Ho said: “It’s encouraging to see business confidence rebounding following last month’s five-point dip to 28%. Trading prospects and optimism have seen a resurgence this month with overall confidence up in all but two of the twelve regions of the UK, which shows positive prospects across the wider economy.  

“However, interest rate rises and cost pressures are still felt by many and we await to see the impact of the latest 50 basis point rise in base rate. Meanwhile, expectations for average pay growth, although down slightly this month, appear to have picked up compared with the start of the year and remain elevated relative to pre-pandemic levels.”