UK business confidence hit 12-month high

Business confidence across Britain rose to its highest level in a year during February after the government revealed its 'roadmap' for a return to normality after 12 months of pandemic lockdowns.

David Sapsted

2 March 2021

The latest 'Business Barometer' from Lloyds Bank Commercial Banking - a survey of 1,200 company executives across the UK - found that confidence last month increased by nine points to +2 per cent, the first net positive reading since March last year.Increases across all UK nations and regions saw a month-on-month increase in confidence in February, with the biggest rises being recorded in NW England (13% vs -5% in January), the East Midlands (10% vs -8% in January), Wales (-5% vs -20% in January) and Scotland (-17% vs -32% in January).Despite these rises, four areas remained in net negative territory: Wales, SW England, the East of England and Scotland. In London, confidence was up +7 per cent, a rise of four points on January, mainly as a result of growing faith in the nation's economic prospects.Mark Amis, regional director for London at Lloyds Bank Commercial Banking, said: "Despite the significant challenges presented by ongoing lockdown restrictions, especially for London’s world-famous tourism and hospitality sectors, it’s encouraging to see confidence creeping up for the second month in a row."This could in part be driven by sectors, such as financial services, having been able to continue operating despite the restrictions.“Whatever the industry, we remain by the side of firms across the capital and will support them through the Covid-19 disruption and beyond.”Across the country, confidence increased across all four broad industry sectors to the highest levels since March 2020. After a soft start to the year, manufacturing jumped by 14 points to +5 per cent, while construction rose eight points to +7 per cent.Even confidence in hard-hit retail sector grew by nine points to +3 per cent, while services advanced by ten points to +1 per cent.Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, commented: “The uplift in business confidence and its entry into positive territory after nearly a year suggests that firms are cautiously pinning their hopes on economic revival in the future and the continued success of the vaccine rollout."In the coming weeks, announcements in the Budget and prospects of an easing of lockdown restrictions will hopefully help to bolster the recovery in business confidence as the economy starts to reopen.”