UK business optimism hits eight-year high, Lloyds says

By Thomson Reuters May 30, 2024 | 6:06 PM

LONDON (Reuters) – British businesses are their most confident in eight years and their hiring plans are the strongest since 2017, according to a survey published on Friday that added to signs of a recovery in the economy as a national election approaches.

The Lloyds Bank Business Barometer jumped by eight points to 50% in May, its highest since November 2015, boosted by optimism among companies about their prospects after a fall in inflation and growing expectations of lower interest rates.

Confidence about the broader economy was its highest since September 2021.

However, in a reminder of the inflation pressures that the Bank of England is watching as it considers when to cut rates, more businesses told Lloyds that they expected to increase their prices for the second month in a row.

Britain’s economy emerged from a short and shallow recession in early 2024 but so far that momentum has not translated into increased support in opinion polls for Prime Minister Rishi Sunak’s struggling Conservative Party before a July 4 election.

A survey by the Recruitment and Employment Confederation, covering the three months to the end of April, also showed a pick-up in confidence among employers who were the most positive in two years about the economic outlook. Investment and hiring intentions jumped too.

The Lloyds survey covers 1,200 firms and was conducted between May 1 and May 16.

(Reporting by William Schomberg; editing by David Milliken)