Overall UK business confidence fell three points in January to 44% – London Business News | London Wallet

Business confidence in London rose five points during January to 68%, according to the latest Business Barometer from Lloyds.

Companies in London reported higher confidence in their own business prospects month-on-month, up 17 points at 81%. When taken alongside their optimism in the economy, down seven points to 55%, this gives a headline confidence reading of 68% (vs. 63% in December 2025).

A net balance of 52% of businesses in the region also expect to increase staff levels over the next year, up five points on last month.

Looking ahead to the next six months, London businesses identified their top target areas for growth as introducing new technology (52%), evolving their offering, for example by introducing new products or services (45%) and entering new markets (44%).

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.

National picture

Overall, UK business confidence fell three points in January to 44%.

While firms’ confidence in their own trading prospects rose seven points to 59%, their optimism in the wider economy fell 14 points to 28%.

London was the most confident UK nation or region in January (68%), followed by Northern Ireland (66%) and the West Midlands (65%).

Sector Insights

Retail sentiment increased marginally in January, up two points to 49%, while confidence in the service sector rose slightly, up one point to 42%, the first increase since the summer. Confidence fell in the construction sector following a particularly strong increase in December.

Kirsty Sadler, Regional Director for London, said: “London has kicked off 2026 with stronger business confidence – great foundations for growth for the year ahead.

“We remain committed to providing the support they need to achieve their ambitions, whether that’s introducing new technology, launching new services, or expanding into new markets.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “Firms are reporting confidence in their trading prospects at the start of the year, despite a slight softening of wider economic optimism. This points to businesses’ ability to manage external risks and a focus on growth opportunities.

“The first rise in confidence in the services sector in seven months is encouraging given the sector’s central role in supporting UK economic activity.”