Lloyds' business confidence barometer bounces back from nine-month low

Business confidence bounced back across Britain in September, following the nine-month low recorded in August, according to a survey from Lloyds Bank.

According to Lloyds' latest Business Barometer, which records an average of business prospects and economic optimism, firms across the UK were more optimistic about the economy, which rose nine points to a four-month high of 26%.

The net balance for companies' own business prospects for the year ahead improved, rising three points to 32%, while the net balance of firms expecting to increase their staff levels in the coming year climbed from 21% in August to 24% in September.

September's survey, which was carried out between 3-17 September, uncovered a net balance of 8% that thought the UK's departure from the EU was having a positive impact on business prospects, compared with the 7% that felt Brexit had caused them a negative impact.

Hann-Ju Ho, the bank's senior economist, said: "August's dip in economic confidence, and consequently in overall business confidence, appears to have been just that – a dip – and has been reversed in September."

"A brighter outlook, while potentially linked to what many firms saw as increasing signs of progress in Brexit negotiations earlier in the month, illustrates a more positive view on the balance of risks facing businesses as we enter the fourth quarter of the year."

Northern Ireland and the South East saw the biggest increases in confidence during September, rising 26 points to 30% and 23 points to 31%, respectively.

London and the North West remained the most confident regions, at 42% and 39%. respectively, while Scotland and Yorkshire and the Humber were the least confident at 7% and 11%.

Firms in the construction sector were the most confident in September, up five points to 41%, followed by consumer services at 33%.

As a result of the ongoing tit-for-tariffs between the USA and China, manufacturing businesses in the UK, the bulk of which rely on exports, saw confidence fall seven points to 31%.

Paul Gordon, managing director for SME and Mid Corporates at Lloyds, said: "Businesses are facing on-going uncertainty on a number of fronts, which can make planning and decision making more difficult. This could explain the drop in confidence in August."

"However, there are some positives emerging, in September businesses in Northern Ireland and the South East saw the biggest increases in confidence, rising 26 points to 30% and 23 points to 31%, respectively. Over the longer term, businesses in London and those in the construction sector remain the most confident, and are the most likely to create new jobs in the coming year."