British Business Confidence Declines in September, Reflecting a Slowing Economy
Business confidence in the UK declined in September, according to the latest survey from Lloyds Bank. The survey, known as the Lloyds Bank Business Barometer, which gathers data from approximately 1,200 companies across various sectors, showed a drop from August’s 18-month high of 41% to 36%.
While the decline in the Lloyds barometer offers a less pessimistic view compared to other indicators like the S&P Global PMI, it aligns with other signs pointing to a slowdown in the economy. The Bank of England (BoE) acknowledged this as it decided to keep interest rates unchanged last week.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, believes that the BoE’s decision, which was made after the survey was conducted, could have a positive impact on business confidence in the upcoming months. He stated, “Although the economic environment remains uncertain with inflation and interest rate pressures playing their part, the recent decision by the Bank of England… is likely to help businesses feel more upbeat about the future.”
The Lloyds survey also highlighted that while expectations for pricing increased slightly in September, hiring intentions cooled. Additionally, the proportion of companies planning to raise salaries decreased, although it remained within the average range for the year.
To gain further insights into the recent performance of the UK economy, the Office for National Statistics is set to publish comprehensive growth data for the second quarter at 0600 GMT.
The decline in business confidence is indicative of a wider trend of economic uncertainty, which has been fueled by factors such as Brexit negotiations and global trade tensions. The outcome of these issues continues to impact the business landscape, leading to cautious decision-making and potential slowdowns in investment and hiring.
As the UK braces for the possibility of a no-deal Brexit and faces ongoing challenges in the global economic landscape, businesses are keenly observing the decisions made by the BoE and government to assess the potential impact on their operations and future prospects.
It remains to be seen how the overall economic climate will evolve in the coming months. However, with the BoE keeping interest rates unchanged and offering reassurance to businesses, there is hope that confidence levels will stabilize and provide a more positive outlook for the UK’s business community.
More detail via Reuters here… ( Image via Reuters )