Business confidence in the UK has improved for the third consecutive month, though it remained well below the long-term historical average, new data reveals.
Overall business confidence was up eight percentage points to -14 percent, according to the Lloyds Bank Business Barometer. Trading prospects for the next 12 months rose nine percentage points to -14 percent, the largest monthly increase for three years.
Regionally, confidence in the South East increased significantly, resulting in the first net positive result across all regions since March. Other regions remain negative, though nine of the 12 regions saw confidence edge up in August.
Due to Covid-19, 62 percent of businesses reported a negative impact on demand, down from 66 percent in July.
“With business confidence sitting well below the long-term average, and official data for Q2 confirming the UK re-entered recession, the shape of any economic recovery remains highly uncertain,” Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said in the report. “Nevertheless, it is encouraging to see gradual improvements in trading prospects and economic optimism, albeit from a low base, which will hopefully continue over the coming months.”
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