Confidence in London business creeps up in January
Business confidence in London rose five points during January to three per cent, according to the latest Business Barometer from Lloyds Bank.
The rise marks the first positive reading on the barometer since the Covid-19 outbreak began.
The business barometer quizzes 1,200 businesses monthly. This month companies in the capital reported higher confidence in their own business prospects month-on-month, up 11 points to nine per cent. This, combined with their views on the economy – down one point to minute two per cent – gave a headline confidence reading of 3 per cent.
Mark Amis, regional director for London at Lloyds Bank Commercial Banking said it was an encouraging sight to see confidence tick into positive territory.
“Firms also report that the vaccine roll-out is fuelling their confidence and helping them feel positive about the coming months,” he added.
Nationally, overall business confidence dipped in January as the third lockdown came into force, falling by three points to minus seven per cent. Firms’ economic optimism dropped dramatically month-on-month, decreasing by 34 points to -10 per cent.
Elsewhere, almost two-thirds (62%) of the firms quizzed said current Covid-19 restrictions had caused a fall in turnover, but they expected the effects of the vaccine programme to boost trading prospects for 2021, with 53 per cent saying the rollout had made them feel more confident about the year ahead.
However, just one in five (20%) expected trading levels to return to pre-pandemic levels in the next twelve months.
When it comes to jobs, a net balance of 2 per cent of businesses in London expected to reduce staff levels over the next year, a month-on-month decrease of seven points.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, added: “It has been a challenging start to the New Year for UK businesses adapting to a third national lockdown alongside the new EU trade arrangement taking effect.
“Nevertheless, while confidence remains below average, it is encouraging that business sentiment is still the second highest since the low of May 2020. Overall, the vaccine rollout programme has lifted confidence and that will hopefully buoy business optimism in the coming months.”