British business confidence hit highs not seen since April 2017 on hopes the economy is recovering strongly to pre-pandemic levels, according to a survey.
According to the Lloyds Bank Business Barometer, confidence climbed six points to 36% in August, while overall economic optimism also increased by 6%. This came after a slight dip in July.
The report showed that pay growth expectations also reached a three-year high, with more than a third of businesses predicting rises of at least 2% over the next 12 months.
Companies anticipating a 3%-plus wage growth increased by five points to 17%, a record level since the question was first asked in 2018. However, the net balance of firms’ expecting to increase their headcount remains at last month’s level (18%).
Retail confidence posted a smaller 2-point rise to 34%, remaining below the recent peak in May.
“Since the start of the year business confidence has been increasing, and August has been a particularly strong month. Many of the regions have seen significant upticks in confidence and it’s encouraging that Northern Ireland has moved back into positive territory,” said Gareth Oakley, managing director for business banking at Lloyds Bank.
“It is clear there is still some level of uncertainty on inflation and the impact of price pressures, but with further boosts to confidence in the services, manufacturing and construction sectors we can be hopeful that demand across all sectors will drive consumption throughout the rest of the year.
“The last few months of the year will be pivotal to the future of UK economic growth and we remain by the side of businesses as the country continues to reopen.”