London business confidence improves heading into Christmas
London firms are growing increasingly confident heading into the Christmas period as inflation falls and markets drop expectations of further rate hikes.
According to the Lloyds Business Barometer, business confidence in London climbed three points to 47 per cent during October.
Companies in the capital reported higher confidence in their own business prospects, with confidence rising seven points month-on-month to 56 per cent, the highest level in the country.
“Another month of above-average confidence will be a boost for the capital’s firms as they head into the busy Christmas season,” Paul Evans, regional director for London at Lloyds Bank Commercial Banking, said.
“It’s clear that firms are already laying the groundwork for the next two months to help deliver a strong finish to the year,” he continued.
Improving confidence in London was replicated elsewhere in the country with business confidence climbing three points to 39 per cent – the second highest level this year.
Firms reported greater confidence in the outlook for the UK economy as well as their own trading prospects. Inflation looks set to fall fast in the coming months while markets currently do not expect any further rate hikes from the Bank of England.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Business confidence this month reflects a more positive outlook as we head into the important festive period, with trading prospects and economic optimism both at their second highest levels this year.”
However, he noted firms are still “safeguarding their profit margins” as inflation and wage growth remains high.
Firms’ pricing expectations also reached a new high in October following a third successive monthly increase. Some 62 per cent of firms plan to raise prices, the survey showed.