Business confidence in London fell 12 points during June to 43%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
While companies in London reported higher confidence in their own business prospects month-on-month, up two points to 56% – the highest of any UK nation or region – their optimism in the economy fell 26 points to 30%. When taken together, this gives a headline confidence reading of 43% (vs. 55% in May).
Looking ahead to the next six months, London businesses identified their top target areas for growth as investing in teams, for example through training (52%), entering new markets (38%), and evolving their offering, for example by introducing new products or services (38%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall UK business confidence fell nine points in June to a net balance of 41%. However, this was consistent with levels seen during Q1 2024, before the sharp rise in May, and remained above the long-term average (28%).
While businesses reported lower confidence in both their own trading prospects, down 10 points to 44%, and the economy, down seven points to 39%, both remained robust.
Yorkshire and the Humber (48%) was the most confident UK nation or region in June, closely followed by the North East of England (47%) and the East Midlands (46%).
Sector insights
Results across the sectors were mixed in June as three of the four sectors saw a decline in trading prospects. Construction fell 16 points to 42% and there were other notable decreases in retail (down 14 points to 35%) and services (down 11 points to 46%). Manufacturing however, bucked this trend, increasing by two points to 51%.
Kirsty Sadler, regional director for London at Lloyds Bank Commercial Banking, said, “Even as overall confidence falls, it’s heartening to see London firms grow even more optimistic when it comes to their own trading prospects – a reflection of the resilience and creativity of the capital’s business community.
“Businesses across the city will be continuing to review their plans to ensure they can make the most of any and all new opportunities on the horizon – whether that’s launching a new product, entering or new markets, or one of our hospitality firms preparing for Taylor Swift’s return to Wembley, and an influx of visitors, in August.
“As they do so, we’ll be by their side with our support and expertise to help turn their ambitions into reality.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, added, “These results suggest a slight drop in business confidence in June as firms’ trading outlook and economic optimism fell below levels seen in recent months. However, these results are still broadly in line with the positive readings we were seeing towards the start of the year.
Fewer businesses indicated that their prices would increase in the next few months, which chimes with last week’s fall in inflation figures. Meanwhile, there was a mixed set of results seen across the sectors, but following last month’s increase, confidence fell in construction as well as retail and services.
