Lloyds Bank’s Business Barometer for January 2018 shows:
- Overall confidence for firms in London is 47 per cent, 12 points above the national average and the joint-highest of all UK regions
- Economic optimism in the region stands at 43 per cent, above that recorded across the UK as a whole
- Firms’ confidence in their own business prospects is 51 per cent, compared with a UK average of 39 per cent
- Two-fifths (40 per cent) of London firms expect to hire more staff in the next year
Business confidence in London is the joint highest of all UK regions in January at 47 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in London are reporting higher than average business prospects at 51 per cent and higher economic optimism at 43 per cent.
Together, this gives an overall confidence of 47 per cent, which is 12 points higher than the UK average of 35 per cent and the joint-highest ranking region analysed (alongside the North West).
Nationally, overall confidence has risen seven points to a nine-month high, driven mainly by a rise in firms’ economic optimism.
The Business Barometer provides early signals about UK economic trends and has been run monthly since January 2002. This is the first time that the survey, which questioned 1,200 businesses, has been carried out on a regional as well as national basis.
Job Creation And Wage Growth
Companies’ hiring intentions show that a net balance of 40 per cent of businesses in London expect to hire more staff during the next year, while firms expect a median annual increase in average pay in the region of one to two per cent during 2018.
Mark Burton, regional director for London and the South at Lloyds Bank Commercial Banking, said: “Firms across London have remained resilient in the face of uncertainty and are now the most confident in the UK about the year ahead.
“Two-fifths of firms in the region are expecting to increase their staff numbers over the next twelve months – which is great news for the region’s economy and a further indication of business leaders’ positive outlook for the capital during 2018.”
London businesses’ economic optimism (43 per cent) is higher than the national average of 31 per cent.
Meanwhile, their confidence in their own business prospects (51 per cent) is 12 points higher than across the UK as a whole.
Across the region, a net balance of 19 per cent of businesses feel that the UK’s exit from the European Union is having a positive impact on their expectations for business activity.
Overall confidence is highest among businesses in London and the North West, both at 47 per cent, followed by the West Midlands at 45 per cent.
Businesses in Wales are the least confident, with an overall confidence 21 points below the national average at 14 per cent.
Figure 1 Breakdown of overall business confidence (January 2018)
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, commented: “Although business prospects have softened from last month’s high, overall UK business confidence has started the year on a strong footing. The sharp increase in economic optimism signals that downside risks have eased and the economy is likely to continue to expand in Q1 this year.”