Business confidence in London fell 19 points during April to 43%, according to the latest Business Barometer from Lloyds.
Companies in London reported lower confidence in their own business prospects month-on-month, down 13 points at 49%. When taken alongside their optimism in the economy, down 26 points to 36%, this gives a headline confidence reading of 43% (vs. 62% in March).
Looking ahead to the next six months, London businesses identified their top target areas for growth as entering new markets (43%), investing in their team, for example through training (43%), and introducing new technology, such as AI or automation (38%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
Overall, UK business confidence fell ten points in April to 39%.
Firms’ optimism in their own trading prospects dropped seven points to 50%, while their confidence in the wider economy fell 13 points to 28%.
The North East was the most confident UK nation or region in April (59%), followed by the West Midlands (53%) and the North West (52%).
Confidence fell across the four broad sectors. Manufacturing confidence remained broadly unchanged from last month, falling by one point to 38%, while the construction sector saw the largest decrease in business confidence this month, declining 22 points to 26%. Retail confidence also fell by 13 points down to 45% and the service industry fell seven points to 40%, both now at three-month lows.
Kirsty Sadler, regional director for London at Lloyds, said: “While business confidence has dipped in London this month, the capital’s businesses remain focused on driving new growth. Whether that’s by entering new markets, or embracing new technology, this shows the adaptability and resilience that characterise the city’s business community.
“We remain committed to supporting London’s businesses as they continue to seek new opportunities and invest in their long-term success.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “With the announcement of global tariffs from the United States on 2nd April and the market volatility that followed, it is unsurprising that business confidence saw an impact this month.
“However, economic optimism remains higher than at the beginning of the year, showing businesses’ resilience in the face of recent challenges and overall confidence is still well above the long-term average of 29%, an average taken from over 20 years of analysis.”
